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Non-bank asset-based lending confidence reached its highest level in more than three years in Q1 2026. It rose 9 points to 67. Bank confidence dropped 7 points to 55 (SFNet, Q1 2026 survey).
If a bank has slowed on your file, a non-bank lender may move faster. That speed often costs a pricing premium, not a discount.
Ask two asset-based lending desks for a term sheet this quarter. You'll get two different attitudes. One is cautious, the other wants the deal.
SFNet's Q1 2026 survey measured that split. Bank confidence fell 7 points to 55. Non-bank confidence rose 9 points to 67.
Bank confidence fell. Non-bank confidence climbed to its highest point in more than three years. Other forces sit underneath that split.
Banks reported tighter commercial lending standards for Q1 2026, per the Fed's April SLOOS. Non-bank lenders work under different funding and risk limits.
None of this means non-bank lenders are the cheap option. They generally aren't. What they offer instead is speed and risk appetite.
Add to that a facility structure a bank credit committee won't approve this quarter. Understanding that tradeoff matters more than chasing whichever lender says yes first. That distinction separates a good financing decision from an expensive one.
Key Takeaways
- Non-bank ABL lender confidence rose 9 points to 67 in Q1 2026, the highest level in more than three years (SFNet).
- Bank ABL lender confidence fell 7 points to 55 over the same quarter (SFNet).
- Utilization rose at both groups. Banks reached 38.4%, just below the 39.7% long-term average. Non-banks reached 54.6%, above the 49.0% average (SFNet).
- New commitments with new clients fell nearly 50% at banks and nearly 74% at non-banks from the prior quarter (SFNet).
- The Federal Reserve's April 2026 SLOOS reported tighter C&I lending standards for Q1 2026, with demand basically unchanged across firms of all sizes.
- The July 2026 SLOOS reported basically unchanged C&I standards for Q2 2026.
- KBRA's 2026 outlook projects a 2% default rate by volume for direct lending in 2026, up from 1.5% in 2025. That covers direct lending broadly, not ABL.
- Non-bank ABL pricing often runs above bank pricing. Speed and flexibility can come at a premium, not a discount.
In This Analysis
What Changed in Asset-Based Lending in 2026
Bank lender confidence fell to 55 in Q1 2026. Non-bank confidence rose to its highest level in more than three years. The split comes from SFNet's Q1 2026 Asset-Based Lending survey, reported June 30, 2026.
The bank confidence score fell 7 points to 55. The non-bank score rose 9 points to 67.
New commitments with new clients fell nearly 50% at banks and nearly 74% at non-banks from the prior quarter. Utilization rose at both groups.
The confidence gap suggests the two groups see risk differently right now.
| Metric, Q1 2026 | Bank ABL | Non-Bank ABL |
|---|---|---|
| Confidence Index | 55 (–7 pts) | 67 (+9 pts, highest in 3+ yrs) |
| New Commitments With New Clients vs. Prior Quarter | Down nearly 50% | Down nearly 74% |
| Utilization on Existing Lines | 38.4% (rose) | 54.6% (rose) |
Source: SFNet, The Secured Lender, June 30, 2026 (Q1 2026 Asset-Based Lending survey).
Utilization rose at both bank and non-bank lenders in the quarter.
New commitments with new clients fell at both groups. That points to a slower quarter for new-deal closings across the market, not only at non-banks.
Where Private Credit Fits in Asset-Based Finance
Private credit means loans made outside the banking system. Asset-based finance means lending against receivables, inventory, equipment and other hard collateral.
Collateral gives a lender something to fall back on if a borrower's cash flow drops. That downside protection is part of the appeal for non-bank lenders in this space.
For a borrower, more non-bank options can mean more lenders willing to look at your file. That can include categories a bank might call too thin or too collateral-heavy to underwrite quickly.
See how facility structure differs by lender type before you start shopping a deal.
What Tighter Bank Standards Mean for Your Deal
Banks reported tighter commercial and industrial lending standards for Q1 2026, per the Federal Reserve's April 2026 Senior Loan Officer Opinion Survey. The July 2026 survey reported basically unchanged standards for Q2.
The April 2026 SLOOS found banks tightening C&I lending standards. That covered firms of all sizes: large, medium, and small. Demand for commercial loans held roughly unchanged over the same period.
Tighter standards with steady demand suggest lenders became more cautious, not that fewer firms wanted credit. The survey covers C&I lending broadly, not ABL specifically.
Tighter standards can slow a deal through credit committee. A bank may ask for more collateral coverage and price more conservatively.
A specialty non-bank lender is not bound by the same regulatory capital rules. It may be able to say yes on the same file sooner.
Banks haven't stopped lending against collateral. The bar moved instead. A borrower who assumes bank ABL hasn't changed may lose weeks finding out.
For a borrower, the practical move is simple. Get quotes from both channels before you assume either one is faster. A bank that tightened standards on paper may still move quickly for the right file.
Bank ABL vs. Non-Bank ABL: The Real Tradeoffs
Banks often win on price. Non-banks often win on speed, flexibility, and risk appetite. Neither side wins on everything.
The honest comparison depends on what your deal actually looks like.
| Factor | Bank ABL | Non-Bank ABL |
|---|---|---|
| Speed | Often several weeks, multiple committee layers | Often faster, fewer approval layers |
| Pricing | Often a lower all-in cost for qualified borrowers | Premium over bank pricing for speed and risk taken |
| Collateral Flexibility | Standard AR, inventory and equipment, with conservative advance rates | Broader collateral types and higher advances on messier assets |
| Deal Size Sweet Spot | Larger, well-documented, established borrowers | Mid-market and smaller, thinner credit files |
| Covenant Rigidity | Tighter financial covenants, less workout room | Looser covenants, more workout flexibility, priced for the risk |
Directional comparison, not a rate quote or market data.
Most asset-based facilities price off SOFR plus a spread. That spread is where the two channels diverge most.
For a full breakdown of non-bank pricing, see our rates and fees analysis. It covers spreads and fees, labeled as estimates.
That doesn't make non-bank ABL the better option by default. A well-qualified borrower with clean financials will often pay less at a bank. That's true with a straightforward collateral pool too.
The calculation changes when speed matters more than rate. It also changes when the collateral is unusual. It changes again when a bank has already passed on the file.
A thinner credit file isn't automatically a dead end. It just changes which channel is likely to say yes fastest, and at what price.
Already got a decline? See what to do next if a bank has already said no.
Where Default Risk Is Headed
KBRA's 2026 outlook projects a 2% default rate by volume for direct lending in 2026, compared with 1.5% in 2025 (KBRA). KBRA may revise forecasts during the year.
This figure covers direct lending broadly, not asset-based lending specifically. ABL is typically viewed as lower-risk than unsecured or cash-flow corporate lending. The loan is backed by hard collateral a lender can seize and liquidate.
Still, a rising default trend can shape how cautious lenders get, banks and non-banks alike. They may respond with tighter advance rates and more frequent borrowing-base audits.
Closer covenant monitoring is possible across both channels too.
That caution cuts both ways for a borrower. A tighter market can mean a slower yes.
It can also mean a lender priced the deal right the first time. That beats resetting terms mid-facility once conditions shift.
A tighter market rewards borrowers who come prepared. Clean financials and organized collateral records move faster through underwriting at either type of lender.
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Methodology
Sourced figures come from SFNet's Q1 2026 survey coverage, the Federal Reserve's Senior Loan Officer Opinion Surveys and KBRA's 2026 outlook.
We did not extrapolate rates or projections beyond what each source states. We did not claim non-bank lenders are cheaper than banks. Available information points the other direction.
Last updated: October 24, 2026.
Sources
Figures labeled as illustrations are examples, not market data. Rates change often. Confirm current terms with a lender.
- SFNet, The Secured Lender, "Resilient Economy, Cautious Borrowers" (Q1 2026 Asset-Based Lending survey, June 30, 2026)
- Federal Reserve, April 2026 Senior Loan Officer Opinion Survey (Q1 2026 C&I standards and demand)
- Federal Reserve, July 2026 Senior Loan Officer Opinion Survey (Q2 2026 C&I standards and demand)
- KBRA, Private Credit 2026 Outlook release (direct lending default projection)
Last reviewed: October 24, 2026
Financial Disclaimer: These figures come from third-party surveys and published outlook reports. They are provided for informational purposes only. Individual rates, fees, and approval odds vary by lender, credit profile, collateral, and industry.
This content does not constitute financial advice.
Meridian Private Line is a marketing affiliate. See our full disclosure policy.
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