Asset-Based Lending Market Size to Grow at a CAGR of 11.32% in the Forecast Period of (2024-2030)
The global Asset-Based Lending (ABL) market, valued at USD 625.35 billion in 2023, is projected to reach USD 1,324.75 billion by 2030, exhibiting a Compound Annual Growth Rate (CAGR) of 11.32% during the forecast period.
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Market Overview
Asset-Based Lending is a financing method where borrowers secure loans using specific assets—such as accounts receivable, inventory, equipment, or real estate—as collateral. This approach allows businesses to leverage their balance sheets to access funding, providing an alternative to traditional creditworthiness-based lending.
Market Growth Drivers
Several factors are contributing to the robust growth of the ABL market:
Increased Liquidity: ABL offers businesses enhanced liquidity and predictable cash flow, which is particularly beneficial for rapidly growing companies, those facing cash flow constraints, or businesses with seasonal income.
Accessibility for Non-Investment Grade Companies: ABL provides funding opportunities for companies with non-investment grade status or those undergoing transitions, which might not qualify for traditional cash flow loans.
Innovative Financial Products: The introduction of new asset-based financial products by key players is stimulating market growth. For example, in April 2022, Metro Bank launched an ABL product allowing businesses to secure credit using a wide range of assets, including inventory, machinery, commercial property, and accounts receivable.
Market Challenges
Despite strong growth, the ABL market faces challenges such as:
Valuation and Transparency Concerns: The reliance on periodic asset valuations in ABL can lead to discrepancies and potential manipulation, raising concerns about transparency and the accuracy of asset assessments.
Risk of Over-Leverage: Excessive reliance on asset-based financing can increase fund-level debt exposure, potentially amplifying losses during periods of financial stress.
Recent Developments
The ABL market has witnessed significant activities, including:
Strategic Partnerships: In October 2024, Viola Credit partnered with Cadma Capital Partners, an affiliate of Apollo Global Management, to form a $500 million joint venture aimed at supporting asset-based loans for technology startups.
Expansion of Private Lending: Apollo Global Management announced plans to more than double its private lending business from $562 billion to $1.2 trillion by 2029, reflecting the growing demand for private credit amid banking sector challenges.
Growth in Asset-Based Lending: Brookfield Asset Management's credit division deployed $7.7 billion and raised nearly $20 billion for its credit funds in the fourth quarter, with plans to more than double its $317 billion in credit assets over the next five years, highlighting significant growth opportunities in asset-based lending.
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Conclusion
The global Asset-Based Lending market is set for substantial expansion, driven by the need for increased liquidity, accessibility for non-investment grade companies, and the introduction of innovative financial products. However, addressing challenges related to valuation transparency and the risk of over-leverage will be crucial for sustained market growth.
About Us
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Asset-Based Lending Market Size to Grow at a CAGR of 11.32% in the Forecast Period of (2024-2030)
The global Asset-Based Lending (ABL) market, valued at USD 625.35 billion in 2023, is projected to reach USD 1,324.75 billion by 2030, exhibiting a Compound Annual Growth Rate (CAGR) of 11.32% during the forecast period.
Request Sample Link for More Details:https://www.maximizemarketresearch.com/request-sample/189641/
Market Overview
Asset-Based Lending is a financing method where borrowers secure loans using specific assets—such as accounts receivable, inventory, equipment, or real estate—as collateral. This approach allows businesses to leverage their balance sheets to access funding, providing an alternative to traditional creditworthiness-based lending.
Market Growth Drivers
Several factors are contributing to the robust growth of the ABL market:
Increased Liquidity: ABL offers businesses enhanced liquidity and predictable cash flow, which is particularly beneficial for rapidly growing companies, those facing cash flow constraints, or businesses with seasonal income.
Accessibility for Non-Investment Grade Companies: ABL provides funding opportunities for companies with non-investment grade status or those undergoing transitions, which might not qualify for traditional cash flow loans.
Innovative Financial Products: The introduction of new asset-based financial products by key players is stimulating market growth. For example, in April 2022, Metro Bank launched an ABL product allowing businesses to secure credit using a wide range of assets, including inventory, machinery, commercial property, and accounts receivable.
Market Challenges
Despite strong growth, the ABL market faces challenges such as:
Valuation and Transparency Concerns: The reliance on periodic asset valuations in ABL can lead to discrepancies and potential manipulation, raising concerns about transparency and the accuracy of asset assessments.
Risk of Over-Leverage: Excessive reliance on asset-based financing can increase fund-level debt exposure, potentially amplifying losses during periods of financial stress.
Recent Developments
The ABL market has witnessed significant activities, including:
Strategic Partnerships: In October 2024, Viola Credit partnered with Cadma Capital Partners, an affiliate of Apollo Global Management, to form a $500 million joint venture aimed at supporting asset-based loans for technology startups.
Expansion of Private Lending: Apollo Global Management announced plans to more than double its private lending business from $562 billion to $1.2 trillion by 2029, reflecting the growing demand for private credit amid banking sector challenges.
Growth in Asset-Based Lending: Brookfield Asset Management's credit division deployed $7.7 billion and raised nearly $20 billion for its credit funds in the fourth quarter, with plans to more than double its $317 billion in credit assets over the next five years, highlighting significant growth opportunities in asset-based lending.
About us:https://www.maximizemarketresearch.com/market-report/asset-based-lending-market/189641/
Conclusion
The global Asset-Based Lending market is set for substantial expansion, driven by the need for increased liquidity, accessibility for non-investment grade companies, and the introduction of innovative financial products. However, addressing challenges related to valuation transparency and the risk of over-leverage will be crucial for sustained market growth.
About Us
Maximize Market Research is one of the fastest-growing market research and business consulting firms serving clients globally. Our revenue impact and focused growth-driven research initiatives make us a proud partner of majority of the Fortune 500 companies. We have a diversified portfolio and serve a variety of industries such as IT & telecom, chemical, food & beverage, aerospace & defense, healthcare and others.
MAXIMIZE MARKET RESEARCH PVT. LTD.
3rd Floor, Navale IT park Phase 2,
Pune Banglore Highway, Narhe
Pune, Maharashtra 411041, India.
+91 9607365656
sales@maximizemarketresearch.com
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