Non‑bank lenders posted their strongest confidence reading in more than three years, while traditional banks slipped into neutral territory, according to the Secured Finance Network’s (SFNet) Q1 2026 Asset‑Based Lending (ABL) survey. The divergence reflects shifting borrower behavior and macro‑economic uncertainty that could affect financing strategies for U.S. corporates.
SFNet Survey Shows Diverging Confidence Scores
The Q1 index recorded a nine‑point rise for non‑bank lenders, taking their confidence score to 67, the highest since early 2023. In contrast, bank confidence fell seven points to 55, moving into neutral range. SFNet CEO Rich Gumbrecht noted that “inflationary pressures and geopolitical uncertainty continue to influence lender expectations,” underscoring the split in sentiment between the two lender groups.
Activity Trends: Commitments, Outstandings, and Utilization
Total commitment volumes were flat for banks compared with Q4 2025, while non‑bank commitments grew modestly by 1%. New outstandings—a measure of fresh borrowing under asset‑based facilities—dropped sharply, falling 26.0% for banks and 70.4% for non‑banks. Despite the slowdown in new deals, utilization rose for both segments: bank utilization increased 1.7 percentage points to 38.4%, and non‑bank utilization climbed 2.5 points to 54.6%, indicating borrowers are drawing more heavily on existing lines.
Portfolio performance presented mixed signals. Banks saw a decline in criticized and classified loans, but non‑accruals edged higher and gross write‑offs fell. Non‑banks experienced a rise in non‑accruals, yet gross write‑offs improved and no non‑bank reported higher write‑offs than the prior quarter.
Implications for Financial Executives
Gumbrecht said lenders are “well‑positioned to support clients as market activity gains momentum later this year” and highlighted an “uptick in demand in Q2.” The data suggests that, while new financing activity remains cautious, existing credit lines are being leveraged more intensively. Executives overseeing treasury or credit functions should monitor utilization trends, as higher draw‑down rates can affect covenant compliance and liquidity planning.
Key Takeaways
- Non‑bank lender confidence rose to 67 in Q1 2026, the highest level in over three years, while bank confidence fell to 55.
- New outstandings fell 26.0% for banks and 70.4% for non‑banks, yet utilization increased to 38.4% for banks and 54.6% for non‑banks.
- Total commitments were unchanged for banks and grew 1% for non‑banks; portfolio performance was mixed, with improved gross write‑offs but rising non‑accruals for non‑banks.
FinanceInsyte's Take
The widening confidence gap signals that non‑bank lenders may become a more prominent source of asset‑based financing as banks pull back. However, the sharp decline in new outstandings and mixed portfolio metrics suggest lingering caution. Financial leaders should watch Q2 utilization trends and non‑accrual movements to gauge whether the market shift translates into sustainable credit availability.
Source: Businesswire
