Confidence levels among both bank and non-bank lenders climbed to their highest point in three years during the fourth quarter of 2024, according to new data released by the Secured Finance Network (SFNet).
SFNet’s quarterly Asset-Based Lending Index and Lender Confidence Index show optimism across the asset-based lending (ABL) market, even as macroeconomic concerns such as tariffs loom. The indexes are based on data collected in mid-February.
The Lender Confidence Index rose 7.1 points to 63.2 for banks and 8.7 points to 65.8 for non-bank lenders.
“Confidence levels were up sharply, though they may soften in future surveys as the economic impact of tariffs becomes clearer,” SFNet CEO Rich Gumbrecht said.
The data highlights a growing divergence between banks and non-bank lenders. Banks reported a slowdown in deal flow, increased runoff in commitments, and shrinking net balances. In contrast, non-bank lenders saw an 11.9% increase in total commitments and a 168% jump in new outstandings.
Purchased participations for non-banks rose to 5.9% of outstandings, up more than two percentage points from 2022. Year-over-year, non-bank lenders posted a 9% gain in new commitments and a 25.7% increase in outstandings. Banks, by comparison, saw double-digit declines in both areas.
Despite economic uncertainty, credit performance remained steady. Non-accruals and write-offs stayed below historical averages, and although criticized loans rose slightly, SFNet found no signs of broad distress in ABL portfolios.
“Non-bank lenders are gaining share by moving with speed and flexibility,” Gumbrecht said. “That adaptability positions the industry to keep supporting middle-market borrowers when they need it most.”
