Lendovative Technologies and Vertical IQ have released the AR and Inventory Reliance Score Reports for the second half of 2025. These reports indicate the likelihood that a given industry sector, through its reliance on either accounts receivable (AR) or inventory, will seek financing from their financial institution or a non-bank funding source during the next six months. Financing arrangements include a range of services, from structured lines of credit secured by AR and/or inventory to more formal asset-based lending and factoring services.
The asset-based lending market in the United States has shown consistent growth in recent years, driven by demand for flexible financing, increased participation from small and medium-sized enterprises (SMEs), and the rise of digital lending platforms. During 2025, the market is projected to be just below $420 billion, and this does not include the market for factoring services, which itself is estimated to be over $180 billion.
AR RELIANCE SCORE REPORT
INVENTORY RELIANCE SCORE REPORT
How are the scores calculated?
Think of each score as a stress test. First, we study both accounts receivable and inventory as a percentage of a company’s total assets. Then we weigh that percentage against the growth rate being experienced in the industry. By merging these two numbers, we can estimate the short-term stresses on a specific industry.
For example, accounts receivable for the average employment services business now represents 43.4% of total assets, and the average growth rate in that industry is 7.2%. When that much of your business is tied up in accounts receivable, it does not take a high rate of growth to require short-term working capital financing. That is why the sector is so popular among asset-based lenders and factoring companies.
The same is true with inventory concentrations. Consider auto parts distributors, where inventory comprises 51.7% of total assets and the average growth rate is 3.1%. As that growth accelerates, or declines, it will impact the need for inventory financing in the sector.
Vertical IQ and Lendovative wish you and your organization success during the remainder of 2025. We also thank the Risk Management Association (RMA) for providing the source data for this initiative.
If you would like to know more about the full scope of services offered by Vertical IQ and Lendovative Technology, reach out to either organization at info@verticalIQ.com or info@lendovative.com.
Vertical IQ is a nationally recognized leader in Industry Intelligence. They deliver actionable, convenient, focused, and easy-to-digest industry insights to help you better understand prospects or clients’ business challenges.
Lendovative Technologies provides collateral management and document archiving solutions for financial institutions. It is a core mission of both organizations to promote small to mid-sized business activities in the United States.