The $173 Billion Impact: How ABL and Factoring Help Power the U.S. Economy

SFNet’s 2026 Economic Impact Study finds asset-based lending and factoring increase U.S. GDP by 0.5% and support nearly 800,000 American jobs.

Asset-based lending and factoring have long occupied a distinctive place in American finance. They provide liquidity when conventional credit may be unavailable, finance working capital as companies expand, and help businesses navigate periods of disruption or financial stress.

But what happens when those individual transactions are added together across the U.S. economy? According to the Secured Finance Network’s 2026 Secured Finance Economic Impact Study, the answer is substantial: ABL and factoring increase the size of the U.S. economy by approximately 0.5%, or $173 billion in annual real GDP, and contribute an additional 773,000 jobs.

Those headline figures put a number on something secured finance professionals have understood for decades. ABL and factoring do more than finance individual companies. By expanding access to working capital, reducing financing costs and helping viable businesses remain open, they generate economic activity that extends well beyond the companies directly using them.

SFNet estimates that approximately 15,000 U.S. borrowers use ABL, with facilities ranging from $100,000 to $5 billion, while another 85,000 businesses use factoring. Together, ABL and factoring provide access to as much as $659 billion in financing.

The study shows how that capital ultimately translates into investment, consumer spending, employment and household income.

Measuring an Economy Without ABL and Factoring

The study measures the industry’s contribution by comparing two economic scenarios: a baseline in which companies have access to ABL and factoring and a hypothetical economy in which those financing options do not exist.

Douglas S. Meade, Ph.D, executive director of Inforum, which conducted the economic modeling for the study, said: “SFNet worked with a group of industry experts to develop assumptions around the core business impacts of ABL and factoring, and Inforum applied those assumptions in our economic model to quantify how these forms of financing benefit the broader U.S. economy. Our modelling work suggests that ABL and factoring generate a notable amount of economic activity in the U.S. and key states.”

The difference between the scenarios estimates the economic contribution generated through three principal channels: expanding access to financing, reducing financing costs and preventing business closures. That distinction is important because eliminating ABL and factoring would not simply cause every borrower to replace its facility with a conventional bank loan.

ABL provides financing based on closely monitored assets such as accounts receivable and inventory, while factoring allows companies to turn invoices into immediate liquidity. Those structures make capital available to companies that may not qualify for conventional cash-flow financing—or may not be able to obtain enough conventional financing to meet their needs.

Research cited in the study from the World Bank has found that enabling companies to use movable assets as collateral expands access to credit, particularly for smaller businesses. The Office of the Comptroller of the Currency has similarly observed that ABL can be the most economical financing option available to certain borrowers.

A $114 Billion Financing Gap

The magnitude of that difference becomes clearer when looking at what would happen if ABL and factoring disappeared. Under SFNet’s baseline assumptions, the two financing structures provide up to $659 billion of available capital, with approximately $279 billion utilized.

Without ABL and factoring, the model estimates approximately $165 billion would migrate to other sources, including cash-flow lenders, high-cost alternative lenders and equity financing. Another $114 billion would simply disappear from the financing available to U.S. businesses.

The financing that does remain would frequently be more expensive. The study estimates companies shifting to cash-flow lenders would face financing costs approximately 4.5 percentage points higher, while firms turning to certain high-cost alternatives could face substantially larger increases. Raising equity would also carry considerably greater economic costs than ABL or factoring.

Those differences have consequences beyond interest expense. Working capital determines whether companies can purchase inventory, carry receivables, meet payroll, accept new customer orders and invest in expansion. For many growing businesses, the limiting factor is not demand but the capital required to support that demand.

ABL and factoring turn assets already on the balance sheet—or invoices awaiting payment—into deployable liquidity.

$173 Billion in Additional GDP

Once those effects ripple through the economy, the impact becomes significant. As mentioned above, SFNet estimates that access to ABL and factoring increases annual U.S. real GDP by approximately $173 billion, equivalent to 0.5% of the economy.

The impact comes from several directions. Businesses with greater access to financing can invest more, employ additional workers and purchase more goods and services. Those expenditures become revenues for other businesses, creating additional rounds of economic activity.

The study estimates that ABL and factoring increase business investment by 2.6% and consumer spending by 0.3% compared with an economy without those financing products. Stronger domestic demand also increases imports, causing net exports to decline 4.1% in the model. Even after accounting for that effect, the net contribution to U.S. GDP remains 0.5%.

For an industry accustomed to measuring commitments, outstandings, borrowing bases and advance rates, the $173 billion figure provides a different perspective on ABL and factoring. The products are not simply alternative sources of commercial credit. According to the study, their availability materially affects the productive capacity of the U.S. economy.

Nearly 800,000 American Jobs

The employment impact is equally significant. SFNet estimates that businesses using ABL and factoring employ between 5 million and 8 million workers. The study then isolates the incremental employment associated with having these financing options available.

The result: approximately 773,000 additional U.S. jobs. That employment effect is sufficient to reduce the national unemployment rate by an estimated 0.4 percentage points.

The benefits extend to household finances. The study estimates that access to ABL and factoring increases real disposable income by 0.5%, equivalent to approximately $940 per household, while increasing the personal savings rate by 0.2 percentage point.

The connection between a commercial financing facility and household income may not always be obvious, but the economic chain is relatively straightforward.

Financing allows a company to purchase inventory or accept additional orders. That activity supports suppliers and may require additional employees. Those employees earn wages and spend money elsewhere. Repeated across tens of thousands of companies, individual financing decisions become meaningful macroeconomic activity.

Keeping Businesses—and Jobs—Alive

ABL and factoring also perform an important defensive role. The products are often used by companies facing financial challenges precisely because collateral-based financing can remain available when conventional credit becomes more difficult to obtain.

According to estimates from secured finance industry experts incorporated into the study, 27% of ABL clients could close without access to ABL, while 40% of factoring clients could close without factoring.

This ability to provide liquidity through periods of stress is an important part of the industry’s economic impact.

The value of secured finance, therefore, cannot be measured solely by the growth it enables during favorable economic conditions. It also comes from preserving companies, supplier relationships, productive capacity and employment when borrowers encounter difficulties.

The Industries Where Secured Finance Matters Most

The economic benefits are particularly pronounced in industries with substantial working-capital requirements.

Wholesale trade accounts for approximately one-quarter of ABL borrowing, according to the study, while electronics, automotive and transportation collectively comprise more than one-third of factoring volume. Construction also benefits indirectly from the additional investment supported by ABL and factoring.

The study estimates that access to these financing structures increases economic output in the automotive sector by approximately 3.9%, construction by 1.5%, electronics by 1.4%, wholesale trade by 1.2%, and transportation and trucking by approximately 0.8%. These industries illustrate why working-capital finance matters.

Manufacturers purchase materials before receiving payment for finished products. Distributors carry inventories and receivables. Transportation companies incur fuel, payroll and maintenance expenses before customers pay invoices. Growing businesses can therefore find themselves consuming cash precisely when sales are increasing. ABL and factoring bridge those timing gaps.

A National Impact With Local Consequences

The state-level results demonstrate how the $173 billion national impact reaches local economies.

In Texas, access to as much as $65 billion of ABL and factoring financing contributes an estimated $19 billion in economic output and 77,000 jobs, while increasing disposable income by approximately $1,430 per household.

In New York, approximately $67 billion of available financing translates into an estimated $19 billion of additional economic output and 73,000 jobs, along with approximately $1,500 in additional disposable income per household.

The pattern is similar elsewhere. Illinois gains an estimated $11 billion in economic output and 63,000 jobs from access to ABL and factoring, while Georgia sees an estimated $8 billion of additional output and 44,000 jobs. California’s estimated impact reaches $20 billion and 57,000 jobs.

The state findings reinforce a central point of the report: secured finance’s impact does not remain within financial centers. It follows borrowers into factories, warehouses, distribution networks, construction projects and communities across the country.

Putting Businesses Behind the Numbers

The report’s case studies demonstrate how those macroeconomic effects begin with individual financing decisions.

California-based Patrick Ta Beauty, for example, needed capital to double its shelf space at Sephora and expand into additional stores but faced challenges obtaining financing because of revenue concentration and other credit considerations associated with an emerging brand. An ABL facility from SG Credit Partners supplied working capital to support that expansion.

In Georgia, an electrical contractor preparing for several large projects—including a multimillion-dollar contract at Hartsfield-Jackson Atlanta International Airport—needed additional working capital as larger projects increased cash-flow demands. A $1 million factoring facility from nFusion Capital converted invoices into immediate liquidity and positioned the business to pursue additional growth.

And in Illinois, Aequum Capital provided a rapidly growing appliance distributor with a $7.5 million ABL facility after its existing bank line could no longer support its working-capital and e-commerce expansion needs.

Different industries and financing structures lead back to the same principle: capital availability can determine whether demand becomes actual economic growth.

Secured Finance as Economic Infrastructure

The 2026 Economic Impact Study ultimately asks a larger question than how much ABL and factoring activity occurs each year. It asks what would happen to the U.S. economy if those financing channels were not available. The answer is stark: less capital, higher financing costs, more business closures, lower investment, weaker consumer spending, lower household income and fewer jobs.

Most notably, the study estimates that the U.S. economy would be approximately $173 billion smaller annually and have 773,000 fewer jobs without the economic activity supported by ABL and factoring. For the secured finance industry, those may be the most important numbers in the report. ABL and factoring increase the size of the U.S. economy by 0.5% and employment by nearly 800,000 jobs.

That finding moves the discussion beyond loan volume and market share. It positions ABL and factoring as part of the financial infrastructure that allows American businesses to convert assets into capital, capital into investment, and investment into economic activity.

The transaction may begin with an invoice, a piece of inventory or a borrowing base. Its impact can ultimately reach much further.

To download the report visit: www.sfnet.com/home/industry-data-publications/industry-insights-trends/sfnet-economic-impact-report

Key Takeaways

1. ABL and factoring increase annual U.S. real GDP by approximately $173 billion, or 0.5% of the economy.
2. The industry supports an estimated 773,000 additional U.S. jobs and increases real disposable income by about $940 per household.
3. Without ABL and factoring, U.S. businesses would lose an estimated $114 billion in available financing, while many would face higher-cost alternatives.
4. Secured finance is especially important in working-capital-intensive sectors such as wholesale trade, automotive, electronics, construction, transportation and trucking.
5. Beyond supporting growth, ABL and factoring help preserve businesses, jobs and supply-chain relationships during periods of financial stress.

Asset-based lending (ABL) and factoring play important roles in providing firms with access to working capital and financing that may not otherwise be available. Using Inforum’s LIFT and STEMS models, this study traces how that financing creates benefits that ripple through business investment, production, employment, and the broader U.S. economy. The results illustrate that the economic importance of these financing mechanisms extends well beyond the firms that rely on them directly.

The Inforum LIFT model is an industry-macro model of the overall US economy. Using survey-based data on the current use of ABL and factoring by major industry groups, we modeled how firms would need to turn to higher-cost lending mechanisms, or possibly lose access to finance altogether.  The effect of these changes was translated into changes in equipment and structures investment by industry, which have further impacts on production, employment and GDP. The macroeconomic results indicated that  ABL and factoring raise U.S. GDP by $173 billion and increase U.S. employment by 773 thousand jobs.

The Inforum STEMS state-level model works together with the LIFT national-level model. It translates the national-level results into impacts by state.  Additional survey-based data on the use of ABL and factoring by state was incorporated into the modeling of five key states: California, New York, Texas, Illinois and Georgia. State-level GDP impacts for this group of states ranged between 0.4% and 0.9%; gains for these state economies are similar in percentage terms to those for the overall U.S. economy.

This analysis demonstrates the substantial investment and economic activity supported by ABL and factoring.

— Douglas S. Meade, Inforum