Nearly every conference 9fin has attended this year featured someone talking at some length about asset-based finance’s potential to get to the same $1.7trn level that private credit is currently at.

Part of the reason for the bullishness on the space — and by extension asset-based lending (ABL) and asset-based securitization (ABS) — is that banks are pulling back from the market because of regulation. Typically the providers of asset-based debt, banks’ exit has provided opportunities for private credit. Where have we heard that before?

Before we continue, some definitions are in order. Asset-based private credit is the catch-all term for any private issuance of a loan tied to an asset. This is not to be confused with asset-based financing, which is any asset based credit product, including those provided by a bank. Asset-based lending is simply loans made against assets. As for ABS, or asset-based securitization, it is when the loans made against assets are securitized into larger portfolios.