Asset-Based Lending Market Size, Share, and COVID-19 Impact Analysis, By Deployment (Cloud and On-Premise), By Finance Type (Consumer Finance, Automotive Finance, Equipment Finance, Working Capital, and Others), By Lender (Banks, Captives, Finance Companies, and Others), By Enterprise Type (SMEs and Large Enterprises) and Regional Forecast, 2024-2032

Asset-based lending (ABL) is financing where a business uses its assets as collateral to secure a loan or line of credit. The value of the assets determines the amount of funding a company can receive. Businesses use financing that needs short-term working capital or funds to support growth. The assets used in asset-based lending include inventory, accounts receivable, real estate, equipment, and others.

Companies are rapidly leveraging ABL solutions as they provide several benefits, including improved cash flow, flexible financing, working capital support, lower interest rates, better risk management, and other growth opportunities. In addition, other corporate assets such as patents, trademarks, and other intangible assets are occasionally used. Moreover, lenders are switching from in-house systems and moving to cloud-based technology. This enables cost savings, operational efficiency, and compliant and secure environments, thus driving the market.

Impact of COVID-19 on the Asset-Based Lending Market

The pandemic detrimentally impacted most of the country’s operations, curtailing profitability and turnover. With onerous trading restrictions and regulatory impositions by the government, many businesses worldwide witnessed weakened balance sheets and cash pressures. To maintain their lifeline, enterprises relied on loans to sustain in the market. Also, to cope with financial hardship, businesses evolved from cash-flow-based to asset-based lines of credit. This increased demand for asset-based lending solutions, thus driving the market. ABL proved to be a flexible and accessible option for businesses looking for additional working capital. Moreover, introducing new products by key players is fuelling and boosting market growth.

• For instance, in November 2020, Northpoint Commercial Finance (financial services company) expanded its product offerings by launching asset-based lending solutions for U.S.-based mid-sized companies.

Thus, ABL aided businesses in navigating through the challenges of the pandemic and creating value in the future.

Segmentation

Key Insights

The report will cover the following key insights:

• Micro Macro Economic Indicators


• Drivers, Restraints, Trends, and Opportunities


• Business Strategies Adopted by the Players


• Impact of COVID-19 on Asset-Based Lending Market


• Consolidated SWOT Analysis of Key Players

Analysis by Enterprise Type

The market is segmented into small & medium enterprises and large enterprises based on enterprise type. Large enterprises hold the largest market share owing to their substantial asset portfolios. These enterprises have diverse collateral options, making them vital participants in driving the asset-based lending market.

However, SMEs are expected to grow with the highest CAGR owing to their growing needs for working capital and liquidity.

• For instance, in September 2022, International Finance Corporation (IFC) estimated that around 43% of SMEs in developing countries have an unmet financing need of nearly USD 4.1 trillion.

Asset-based lending solutions aid SMEs by providing flexible funding solutions that cater to their financial situations and help them expand their operations.

Regional Analysis

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The asset-based lending market is studied across five regions: North America, South America, Europe, the Middle East & Africa, and Asia Pacific. North America holds the largest market share owing to the well-developed financial infrastructure in the economy. Moreover, the U.S. contributes to the growth with the presence of large number of businesses in the country. According to a new study from the Secured Finance Network, the total number of U.S. ABL commitments was USD 502.3 billion by the end of 2022, a 10% increase from the previous year.

Moreover, Asia Pacific is estimated to grow with the highest CAGR owing to the rise of SMEs in the fastest-growing economies, including China, India, and Southeast Asian countries.

The distribution of the asset-based lending market by region of origin is as follows:

• North America – 49%


• Europe – 16%


• Asia Pacific – 26%


• The Middle East and Africa – 6%


• South America – 3%

Key Players Covered

• The major global players operating in the global Asset-Based Lending market include ABLSoft, Solifi, Sopra Banking Software, Cync Software, Aptic, CODIX, ConvergeSol Inc., FinSoft, LLC,  NETSOL Technologies, Odessa Technologies, among others.

Key Industry Developments:

• February 2023: Solifi launched the latest version of ABL software, including enhanced features such as greater risk management, loan syndication data and automated workflows, and self-service white-label capabilities.


• January 2023: Solifi partnered with Codat to enable ABL firms to make faster credit decisions. With the help of Solifi’s SaaS-based ABL solution, Codat integrates business data into operational systems in real-time.