Headline advance rates on AR and inventory ABL facilities held flat year-over-year, but borrowing base eligibility tightened — and that's where the real story lives.
Headline ABL pricing has been a study in stability: senior AR advance rates remain 80% to 85%, inventory at 50% to 65% of NOLV, with all-in pricing at SOFR + 275 to 450 bps for middle-market files. Year-over-year, those numbers have barely moved.
What has moved is borrowing-base eligibility. Lenders have tightened concentration limits, dilution reserves, and slow-moving inventory carve-outs. Reported borrowing base availability on the same gross collateral pool is running 4 to 7 percent lower than 2024.
Borrowers should model availability conservatively. A facility sized to nominal advance rates can suddenly tighten when the field exam reclassifies aged AR or slow-moving SKUs.
Lenders are still highly responsive to clean monthly reporting and ERP-integrated borrowing base certificates. Investing in that infrastructure typically recovers more capacity than fighting on headline advance rates.
Average buy rates across A-paper merchants tightened 9 bps month-over-month as risk-on capital rotated back into short-duration revenue-based product.
Twelve-month default rates on 2026 originations are tracking 80 bps below the 2023 vintage at the same seasoning point, with the largest improvement in services and B2B.
Spot rates have stabilized but fuel volatility, insurance inflation, and concentration risk continue to keep most lender boxes restrictive on owner-operators.
