Growth, deals and headroom: how businesses are using ABL in 2025

We’ve seen a big rise in asset-based lending (ABL) in recent months. New lenders are entering the space and clients are using ABL to fund everything from day-to-day growth to acquisitions and buyouts. This is no longer a product for the few. It’s fast becoming the go-to for mid-sized firms who need flexibility, bigger sums and a funding line that moves with them.

Is asset-based lending growing in popularity?

Yes. We’ve seen a big shift. More firms are using ABL to refinance loans, raise working capital or fund change. Several new lenders have entered the market and existing ones are stepping up their appetite. We’ve used ABL facilities this year for buy-ins, buyouts, acquisitions and working capital support across a range of sectors – engineering, recruitment and manufacturing among them.

Why are more businesses using it now?

Growth often ties up cash. So does change. Many firms have money stuck in stock, unpaid invoices or kit. As project sizes grow, the gap between cost and payment gets harder to manage. ABL fills that gap. It’s flexible, moves with your sales and can sit behind other funding. It’s also being used more often when firms switch away from high-street banks.

Is asset-based lending only for big companies?

Not at all. We’ve seen firms with turnover from £3 million to £50 million use it. The sweet spot is often £5 million to £25 million but that’s not fixed. If a business has valuable assets and wants to grow, ABL can be a great fit. We’re also seeing it used by firms that have outgrown invoice finance but don’t want to lose the cashflow benefits.

What can it be used for?

The most common use is growth. It gives a bigger funding line than invoice finance or a term loan. You can raise more money across stock, property, plant and receivables. But we’ve also used it for certain milestones – one client purchased the building the firm is headquartered in, another funded a buyout, another used it support the expansion of its business and a third used it to reduce monthly repayments.

Are there any risks to be aware of?

As with any secured lending, there’s always a link to the asset. If repayments fail, the lender can recover the debt through that security. But ABL is often safer than stretching yourself thin with an unsecured loan. It’s built to match the asset value. If structured well and used right, it’s a smart way to raise more cash without giving up control.

How do I know if it’s right for my business?

If your business is growing and has working assets, it’s worth a look. You don’t need to be in distress or desperate for cash. Some of the best ABL deals we’ve worked on were for well-run, profitable businesses that wanted to invest, buy, scale or restructure. If your existing funding is too small or too rigid, ABL could be a better fit.

Asset-based lending is no longer niche. It’s a key tool for growing firms who want headroom without hassle. If you’d like to know whether ABL could help your business fund change or plan for growth, give us a shout. We’re happy to talk it through. Contact Stef Radymski  or Nilima Begum at Evolve Business Finance for a quick chat or to get started.