The Secured Finance Network (SFNet) released its Q3 2025 Asset-Based Lending Index and Lender Confidence Index, offering a snapshot of how the industry has remained strong despite tariff headwinds, a government shutdown, and private credit bankruptcies in the headlines.

According to the Q3 survey, conducted between mid-October and early November, non-banks were a bit more optimistic than banks about industry conditions over the next quarter. For banks, the combined sentiment score edged three points higher to 59, driven by improved sentiment around demand, utilization, and hiring. For non-banks, the combined score edged one point lower to 63, as a modest improvement in the demand index was offset by flat utilization and slightly lower scores for business conditions, portfolio performance, and hiring.

“Though the government shutdown has temporarily obscured the U.S. economic outlook, the emerging picture suggests the economy has remained resilient thus far but may face significant challenges in the months ahead,” SFNet CEO Rich Gumbrecht said. “Although several major data releases remain delayed due to the shutdown, available indicators signal that the economy expanded at a strong pace in Q3.”

And indeed, the third quarter of 2025 was a solid one for both banks and non-banks:

• Total commitments for banks jumped 1.1%; total commitments for non-banks increased 2.2%
• Net outstandings were flat for both banks and non-banks during the quarter but up 5.5% and 17% year over year respectively

Similar to the previous quarter, bank portfolio performance remained mixed in Q3. Non-accruals rose, but varied widely by bank, write-offs fell, and criticized loans – which have elevated credit risk – continued to trend downward. The decline in criticized loans among banks suggests a normalization trend, where previously stressed borrowers have improved their financial condition or exited their portfolios.

Non-bank portfolio performance was similarly uneven. Criticized loans and non-accruals climbed higher and write-offs were nearly flat as a share of outstandings. Non-bank lenders’ steadier write-off rates demonstrate tighter underwriting and a more selective approach to new origination.

“High-profile bankruptcies are making headlines, but asset-based lenders are vigilantly monitoring their portfolios and report no signs of major weakness,” Gumbrecht said. “Looking ahead, lenders are cautiously optimistic about a potential uptick in demand and are ready to provide vital working capital for businesses in need.”

The Q3 2025 Asset-Based Lending Index and Lender Confidence Index are based on survey data from leading bank and non-bank lenders. Full quarterly and annual data reports are available at: SFNet Asset-Based Lending & Factoring Surveys.