Asset Based Lending Market 2025 – Market Size & Segments Analysis, Industry Trends, Manufacturers Analysis, Opportunities and Forecast 2034
Page: 215 | Report Code: BFSI250116 | Research Suite: Report (PDF) & Market Data (Excel)
Asset based lending is referred to a type of loan depending
upon the strength and stability of the lending company’s cash flow as a
collateral on fixed and floating interest.
MARKET
OVERVIEW
The market valuation of the asset-based lending market was valued at approximately USD xx billion in 2023 and is projected to reach USD xx billion in 2034 exhibiting a CAGR of xx.x% during the forecast period of 2024-2034. The market is aligned with diverse sector, which makes it a sustainable and growing market.
GROWTH
DRIVERS
The increase in the need for working capital flexibility is a primary driver of the market which allows businesses to maintain liquidity during fluctuations in cash flow. Wells Fargo States that asset-based lending offers an alternative that may provide more flexibility and help maximize borrowing capacity where the businesses seek capital to support ongoing operations or expansion.
Moreover, the asset-based lending serves as a viable option during economic uncertainty or market volatility which is another significant driver of the market. As per KKR, a global investment firm, the private asset-based finance asset class at the end of 2022 was 67% bigger than in 2006 and 15% bigger than it was in 2020. Its share of the overall asset-backed market has risen from just over one-third in 2006 to nearly half today.
The outlook for the future is equally promising, with the market
expected to grow from $5.2 trillion to USD 7.7 trillion by 2027. The growth of
small and medium enterprise is another growth driver of the market as they are
more incident to landings in order to grow their businesses. The United Nation
state that MSMEs account for 90% of businesses, 60 to 70% of employment and 50%
of GDP worldwide.
MARKET
SEGMENTATION:
·
By Type- inventory
financing, receivables financing, equipment financing and others
·
By Interest Rate- fixed
rate and interest rate
·
By End Users- Large
enterprises, small and medium enterprises
·
By Regions- North America,
Europe, Asia Pacific, South America, Middle East and Africa
Asset
Based Lending Market Segment by Type Review:
The asset-based lending involves various types of lending options where different types of assets are utilized as collateral which includes inventory financing where the receiver secures loan by keeping the inventory at stake or collateral whereas receivables financing involves the use of accounts receivable. Similarly, equipment financing involves the use of mahinery and other fixed assets for securing the loan.
Regional Analysis:
North America is a significant market driven by the presence
of key global players and well-established financial ecosystem. Europe is
another significant market driven by the presence of key global companies and
robust industrial sectors leading to stable supply and demand of the market.
APAC is a significantly growing market driven by rapid industrialization and
growing finance sector. MEA is a promising market driven by infrastructure
development and emerging financial markets. South America is another growing
market driven by presence of SMEs and growth in agricultural
sector.
Key
Challenges:
The asset-based lending market is incident to regulatory
compliance where navigating through diverse regulatory and legal framework may
be time consuming, hindering market growth. Moreover, the market is aligned
with ability of the borrower where business with poor or stagnant cash flow may
not be eligible for the lending, hindering the market growth among small
businesses.
Competitive
Landscape:
In the
highly competitive Asset Based Lending market, companies are investing heavily
in research and development to innovate and improve their products and
services. They are also collaborating, forming strategic partnerships, or
acquiring other companies to gain access to new market segments, enhance distribution
networks, and increase market share.
The key recent news and development
includes-
·
In January 2024, FundPark, a Hong
Kong-based FinTech company, has successfully secured a significant asset-backed
securitization facility USD 500 million from Goldman Sachs. The newly secured
USD 500 million facility is expected to enhance FundPark's capacity to support
a broader range of entrepreneurs, particularly in Asia, where the cross-border
eCommerce market is rapidly expanding. The Federal Reserve has kept the federal
funds rate steady at a 23-year high of 5.25% to 5.50% for the eighth
consecutive meeting as of July 2024.
·
In June 2024, Wells Fargo has taken the
lead in a syndicate that closed a significant asset-based lending (ABL) credit
facility amounting to USD 1.1 billion for White Oak Commercial Finance (WOCF).
This facility was finalized with the participation of 11 other unnamed banks,
marking a notable boost in WOCF's lending capabilities.
· In November 2023, Neiman Marcus Group has announced a significant amendment and extension to its asset-based lending (ABL) credit facility. The company entered into a Fourth Amendment to its existing Credit Agreement, which governs a USD 900 million ABL facility led by Bank of America, N.A. as both Administrative and Collateral Agent.
Global Key Players:
·
Lloyds Bank
·
Barclays Bank PLC
·
Hilton-Baird Group
·
JPMorgan Chase & Co
·
Berkshire Bank
·
White Oak Financial, LLC
·
Wells Fargo
·
Porter Capital
·
Capital Funding Solutions Inc.
·
SLR Credit Solutions
· Other Players
Attributes |
Details |
Base Year |
2023 |
Trend Period |
2024 – 2034 |
Forecast Period |
2024 – 2034 |
Pages |
215 |
By Type |
Inventory Financing, Receivables
Financing, Equipment Financing And Others |
By Interest Rate |
Fixed Rate And Interest
Rate |
By End Users |
Large Enterprises,
Small And Medium Enterprises |
By region |
North America, Europe,
Asia Pacific, the Middle East and Africa, and South America |
Company Profiles |
Lloyds Bank, Barclays
Bank PLC, Hilton-Baird Group, JPMorgan Chase & Co, Berkshire Bank, White
Oak Financial, LLC, Wells Fargo, Porter Capital, Capital Funding Solutions
Inc., SLR Credit Solutions, Other Players |
Edition |
1st edition |
Publication |
January 2025 |