Asset-based Lending Market Trends

Asset-based Lending Market Trends

The globalization of business operations is driving an expansion in cross-border asset-based lending. Companies operating in multiple countries are seeking financing solutions that can accommodate their international asset portfolios. Lenders are responding by offering more sophisticated cross-border ABL solutions that cater to the complexities of global asset management and regulatory compliance.
 

For instance, 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.
 

SMEs are becoming a larger segment of the asset-based lending market. These businesses are increasingly turning to asset-based lending to secure working capital, manage cash flow, and fund expansion projects. The flexibility and accessibility of ABL make it an attractive option for SMEs that may not have access to traditional bank financing or prefer the agility that ABL offers.
 

For instance, according to data from UK Finance in March 2024, In the fourth quarter of 2023, approximately USD 4.5 billion was lent to small and medium-sized enterprises (SMEs) in the UK, marking the first quarter without a decline in lending since the second quarter of 2022. This rebound is indicative of the growing reliance of SMEs on asset-based lending to secure working capital and support their operational needs. The improvement in lending figures underscores the increasing role of ABL as a crucial financing tool for SMEs, which often face challenges accessing traditional credit.