Private credit refers to financing provided by non-bank entities to individuals or organizations, typically outside of public markets. This type of credit can include loans, mortgages, and other debt instruments that are not issued or traded publicly. Private credit is often sourced from private equity firms, hedge funds, or other institutional investors, and is commonly used to finance businesses, particularly private companies or those unable to secure traditional loans from banks.
The private credit market has grown significantly as investors seek higher yields in a low-interest-rate environment. Investors in private credit often take on higher risks in exchange for potentially greater returns. The terms of private credit loans can vary widely, including aspects such as interest rates, maturity periods, and collateral requirements, making them tailored solutions for borrowers with specific needs.
Private credit can also play a vital role in providing capital to support business growth, acquisitions, or restructuring, making it an essential component of the overall financial system.
The Rise of Nonbank Lending The landscape of corporate lending in the United States is undergoing a dramatic transformation. A recent report from Deloitte outlines how private credit has surged,…