The asset-based lending market size is expected to grow from US$ 740.24 billion in 2023 to US$ 1,901.66 billion by 2031; it is anticipated to expand at a CAGR of 12.5% from 2023 to 2031. Easier qualification criteria for asset-based lending are expected to offer high growth opportunities.
Asset-Based Lending Market Analysis
Asset-based lending is a large asset class that reaches across many different segments of the economy. The ongoing disintermediation of traditional bank financing and technological innovation has spurred rapid growth in recent years, and the trend is expected to continue. Traditional business financing, which evaluates a company's cash flow, is effective for many businesses. However, some companies may be eligible for additional borrowing based on their owned assets. This alternative approach, known as asset-based lending, is more suitable for them. Asset-based lending market solutions allow a wide range of assets, including accounts receivable, brand names, real estate, and intellectual property, to be used as collateral, providing access to vital capital. For businesses with substantial assets, asset-based lending offers significant financing options with a flexible structure that allows for future decision-making. Moreover, special arrangements like FILO (first in, last out) tranches can increase the borrowing capacity.
Asset-Based Lending
Industry Overview
- Lenders favor highly liquid collateral, such as securities, which can converted to cash easily, for times when the borrower defaults on the payments. Loans against physical assets are deemed riskier, and hence, the maximum loan is often less than the book value of the assets.
- There are wide variations in Interest rates, depending on the applicant's credit history, length of time doing business, and cash flow. The collateral-based cash flows that asset-based lending generates are also important in a time of high inflation and macroeconomic uncertainty. The underlying collateral has a tangible value, and the cash flows attached to that collateral are often contractual in nature.
- Moreover, the replacement value of physical collateral tends to rise along with prices in the broader economy.
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Asset-Based Lending Market: Strategic Insights
Market Size Value in US$ 740.24 billion in 2023 Market Size Value by US$ 1,901.66 billion by 2031 Growth rate CAGR of 12.5% from 2023 to 2031 Forecast Period 2023-2031 Base Year 2023
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Asset-Based Lending Market: Strategic Insights
| Market Size Value in | US$ 740.24 billion in 2023 |
| Market Size Value by | US$ 1,901.66 billion by 2031 |
| Growth rate | CAGR of 12.5% from 2023 to 2031 |
| Forecast Period | 2023-2031 |
| Base Year | 2023 |
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Asset-Based Lending Market Drivers and Opportunities
Private Asset-Based Lending to Drive the Asset-Based Lending Market Growth
- The notable speed at which private asset-based lending surged in the outcome of the global financial crisis can be contemplated as a sign of the ongoing structural shift.
- The disintermediation of traditional financial channels has been critical to the growth of private asset-based lending over the last few years. Post the financial crisis, several central banks of different developed nations bought mortgage-backed securities to inject liquidity into the market and restore confidence, while also raising reserve requirements and clamping down on risk-taking. It led to levying higher capital charges on non-mainstream lending.
- The banks responded by lowering their loan books and extending credit to long-established customers on routine terms. It led to the non-availability of funding for several creditworthy consumers and, in turn, increased demand for private asset-based lending.
- With the ongoing economic turmoil, the above-mentioned trend is anticipated to offer good opportunities for asset-based lending market growth.
Asset-Based Lending
Market Report Segmentation Analysis
- Based on the interest rate, the market is bifurcated into a fixed rate and floating rate.
- The fixed-rate segment achieved the highest asset-based lending market share in 2023. It can be attributed to fixed-rate loan's principal benefit of shielding the borrower against unexpected and possibly large increases in monthly payments during sudden spikes in interest rates. Furthermore, loans with fixed rates can be comprehended easily and showcase lesser variation between lenders.
Asset-Based Lending
Market Share Analysis By Geography
The scope of the asset-based lending market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. Asia Pacific (APAC) is experiencing rapid growth, but North America is anticipated to hold the largest asset-based lending market share. APAC’s significant economic development and growing interest in trading have presented substantial opportunities for asset-based lending to expand. In the US, non-bank lenders have extended asset-based lending against more than 20% of assets available as collateral. Such trends promote the market growth in North America.
Asset-Based Lending
Market Report Scope
The "Asset-Based Lending Market Analysis" was carried out based on type, interest rate, organization size, and geography. In terms of type, the market is segmented into equipment financing, inventory financing, receivables financing, and others. Based on the interest rate, the market is bifurcated into a fixed rate and floating rate. In terms of organization size, the market is bifurcated into SMEs and large enterprises. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Asset-Based Lending
Market News and Recent Developments
Companies adopt inorganic and organic strategies such as mergers and acquisitions in the asset-based lending market. A few recent key market developments are listed below:
- In March 2024, Praetura Commercial Finance – together with sister company Zodeq –secured a £200m asset-based lending securitization facility provided by Barclays to boost support for SMEs across the UK. The Barclays facility enhances Praetura’s ability to meet rising demand for alternative lending, with the business expecting to support over 1,000 additional SMEs each year.
[Source: Praetura Commercial Finance, Company Website]
- In October 2023, Solifi, a global fintech software partner for secured finance, announced the latest product enhancements for Solifi asset-based lending. The release includes several new features aimed at improving efficiency through automation, reporting, and customer experience. The company’s SaaS Open Finance Platform enables the rapid release of new features that improve communication between lenders and borrowers. These new features reduce the requirement for manual reporting while bringing innovation to the company’s asset-based lending and receivables financing lenders and customers without disruption to their business.
[Source: Solifi, Company Website]
Asset-Based Lending
Market Report Coverage & Deliverables
The market report on “Asset-Based Lending Market Size and Forecast (2021–2031)”, provides a detailed analysis of the market covering below areas-
- Market size & forecast at global, regional, and country- level for all the key market segments covered under the scope.
- Market dynamics such as drivers, restraints, and key opportunities.
- Key future trends.
- Detailed PEST & SWOT analysis
- Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
- Industry landscape and competition analysis covering market concentration, heat map analysis, key players, and recent developments.
- Detailed company profiles.
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Type, Interest Rate, Organization Size and Geography
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
This text is related
to country scope.
Frequently Asked Questions
The key players holding the majority of shares in the global asset-based lending market are Barclays Bank, Berkshire Bank, Capital Funding Solutions, JPMorgan Chase & Co, and Wells Fargo.
The global market is expected to reach US$ 1,901.66 billion by 2030.
The global market was estimated to be US$ 740.24 billion in 2023 and is expected to grow at a CAGR of 12.5 % during the forecast period 2023 - 2031.
The growth of private asset-based lending is expected to play a significant role in the market in the coming years.
Easier qualifications and easy access to loans are the major factors that propel the global asset-based lending market.
- Barclays Bank
- Berkshire Bank
- Capital Funding Solutions
- Crystal Financial
- Hilton-Baird
- JPMorgan Chase and Co
- Lloyds Bank
- Porter Capital
- Wells Fargo
- White Oak Financial
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
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Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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