Asset Based Loans: Stats Tell the Story

Sterling Commercial Credit Asset Based Loans
February 2015

According to the latest statistics, it has been revealed that traditional lending is showing a downward turn and people are showing interest in asset based lending. In fact, growing by the uptrend in the asset based lending, it is expected to grow even more in the future. The overall volume of small business loans has been sliding down according to FDIC.

This downward trend has been noticed since 2008. Recently, the volume of small business loans went down 15% from its peak. Since the year 1999, the number of outstanding small business loans has been continuously declining. The figure currently stands at about 1.5 million as notified by FDCI.

An Asset Based Lending Index is formatted by the Commercial Finance Association and published quarterly. The most recent report indicates there was a 1.8% rise in the total committed asset-based credit lines in the first quarter of the year 2012 in comparison to the previous quarter. Also, as compared to the earlier year, the total credit commitments were up by as much as 7.3%. Moreover, there was an increase in the new credit commitments in more than half of asset-based lenders by almost 55 per cent.

In the first quarter of the year 2012, the utilization of asset-based lender’s credit has jumped to 40.85. The rise was 39.4 per cent in the previous quarter. And in the same quarter in the year 2011, it was 39.1 per cent.

Brian Cove, the CFA’S chief Operating Officer points out that the asset based lenders will continue to take the fore front as the primary source of growth and working capital for the United States as they have managed to maintain throughout the credit crisis and through the recession, if the economy continues to prosper with the same rate.