Asset-Based Finance Set to Hit $1.65T by 2030 as Banks Pull Back, Arcesium Outlook
- Editor
- Feb 9
- 2 min read
What's New
According to Arcesium's latest whitepaper "The Future Outlook of Asset-Based Finance," the asset-based financing (ABF) market is projected to grow at a CAGR of 16.39% to reach $1.65 trillion by 2030, as traditional banks continue their retreat from corporate lending.
Why It Matters
This shift represents a fundamental transformation in corporate financing, with ABF emerging as a crucial alternative funding source for businesses, particularly SMEs, who face increasing difficulty accessing traditional bank loans in the current economic climate.
Big Picture Drivers
Bank Retreat: Traditional banks' share of corporate lending dropped from 44% to 35% in just one year as private credit firms step in
Economic Pressure: Persistent high inflation and mounting interest rates force companies to seek alternative financing solutions
Technology: Advanced platforms enabling automated data management and real-time analytics drive operational efficiency
Market Access: Growing demand in emerging markets, where 65 million firms face a $5.2 trillion annual financing gap
Stability: 58% of ABF loans offer fixed interest rates, providing predictable costs during market volatility
By The Numbers
$20 trillion: Current estimated size of US ABF market (PIMCO)
61%: Share of large enterprises in ABF borrowing (2023)
16.39%: Projected CAGR through 2030
68%: Corporate debt to book value ratio
$1.4 trillion: Investment-grade US bonds issued in 2024
Key Trends to Watch
Digital Transformation will drive more sophisticated risk assessment models and streamlined processes.
Regulatory Evolution is expected to bring increased standardization and transparency to the sector.
Geographic Expansion into emerging markets will create new opportunities and diversify offerings.
Technology Integration will become crucial for managing complex middle and back-office operations.
The Wrap
As traditional banks continue their retreat from corporate lending, asset-based finance is positioned to become a cornerstone of modern finance, offering essential liquidity support across industries while being transformed by technological innovation and expanding market opportunities.
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