Asset-Backed Finance: High Risk, High Reward
Update: 2025-12-02
Description
Asset-backed finance, a rapidly growing sector in lending, has gained attention due to the bankruptcy of First Brands Group. This type of finance involves lending based on specific assets, now standing at over six trillion dollars. Experts predict it could reach nine trillion by 2029. While offering attractive returns and spreading risk, concerns arise as lending standards may be loosening and assets used as collateral becoming unusual. The First Brands case, where the company borrowed against customer receivables, highlights the need for thorough checks and due diligence in this high-risk, high-reward sector.
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