As businesses continue to contend with higher borrowing costs, persistent inflation and economic uncertainty, new data from the Secured Finance Network (SFNet) points to renewed momentum in asset-based lending. SFNet’s Q2/26 Asset-Based Lending Index and Lender Confidence Index show a rebound in deal activity as companies increasingly look to flexible financing solutions to manage evolving working-capital needs.
According to the Q2 survey, conducted between July 21 and Aug. 12, bank and non-bank lenders both reported slightly positive outlooks for the next three months. The combined sentiment score for banks rose 4 points to 59, while the non-bank score remained higher at 65, down slightly by 2 points from the previous quarter.
“Businesses are navigating higher costs driven by elevated interest rates and economic uncertainty, creating complex working-capital needs,” Stephen Beriau, SFNet member and senior managing director for Eclipse Business Capital, said. “The liquidity and flexibility offered by asset-based lending is increasingly seen as a tool for managing that complexity.”
Demand expectations remained particularly strong. The bank index for demand for new business increased 8 points to 68, with 36% of banks expecting demand to improve. Among non-banks, the demand index increased 2 points to 83, with two-thirds expecting improvement. No lenders in either group expect demand to weaken.
And indeed, the second quarter saw a significant rebound in new deal activity:
- New commitments with new clients rose 58.7% quarter over quarter for banks and 60.9% for non-banks
- Bank total commitments increased 1.3% and outstandings increased 2.0% quarter over quarter
- Non-bank total commitments increased 3.9%, while outstandings declined 1.2% quarter over quarter
Bank portfolio performance also improved during the quarter. Criticized and classified loans declined 80 basis points to 10% of outstandings, while non-accruals fell to 0.78% and gross write-offs declined to 0.09%, both below their respective 30-year averages of 0.92% and 0.41%. Nearly three-fifths of banks reported a decrease in criticized and classified loans.
Non-bank portfolio performance was mixed. Criticized and classified loans and non-accruals increased, although two-thirds of non-banks reported no change in criticized and classified loans. Gross write-offs remained at 0.0% of outstandings, with all non-bank respondents reporting no quarter-over-quarter change.
The Q2/26 Asset-Based Lending Index and Lender Confidence Index are based on survey data from leading bank and non-bank lenders. Thirty-six lenders participated in the Q2 2026 ABL survey.
