US ABL non-accrual rate hits highest level since 2011 as credit stress builds

Non-accrual loans reported by US asset-based lenders have climbed to their highest level since 2011, according to analysis of Secured Finance Network data, providing a potentially important warning that stress is building among leveraged and middle-market borrowers even while public credit markets remain comparatively calm.

The non-accrual rate reached 1.38% of loans outstanding in the first quarter of 2026, up from 1.33% in the fourth quarter of 2025 and around 0.2% during the unusually benign period seen in 2022.

The change has been particularly sharp since early 2025. Non-accruals almost doubled from 0.54% to 1.00% in the first quarter of that year and have remained above 1% since.

The latest level is approximately half the roughly 2.6% peak reconstructed for the aftermath of the global financial crisis in early 2010, but the direction of travel matters for lenders because deterioration in collateral-backed portfolios can emerge before broader credit markets fully reflect borrower stress.

Research by Hao Ding and April Goulding of Bayes Business School argues that SFNet’s quarterly lending data has historically contained information about system-wide financial stress as much as two years before it becomes visible elsewhere.

That makes the rise relevant beyond the immediate ABL market.

Asset-based lenders monitor receivables turnover, inventory performance, collateral values and borrowing-base availability closely. Deteriorating collections or slower inventory conversion can therefore expose cash-flow pressure earlier than conventional corporate default measures.

The warning is not equivalent to a prediction of a financial crisis. Securities markets remain comparatively constructive, securitisation spreads are tight and issuance remains active, according to the analysis.

However, that divergence is precisely what makes the secured-finance data noteworthy.

If non-accruals continue to rise, lenders could respond through tighter eligibility rules, larger reserves, reduced advance rates or closer collateral monitoring. Those changes can in turn reduce working-capital availability for borrowers before a formal payment default occurs.

The figures therefore provide a useful early measure of whether deteriorating borrower quality is starting to move from isolated restructuring cases into a broader secured-lending trend.