The Rise of Private Credit: Trends, Strategies, and Regulation in Private Credit

In today’s ever evolving and complex financial landscape, companies of all sizes require external funding to spur their growth. Such financial assistance is typically provided by banks, which give out loans, or from companies, which issue bonds tradable on the public market. However, these traditional debt instruments can be too rigid for modern businesses that require greater flexibility. This is where private credit steps in. Fast, efficient, and uniquely tailored, private credit comprises loans provided by non-bank institutions directly to companies. These loans are not publicly traded, which reduces liquidity for investors but in turn provides much more attractive yields. Private credit also allows for vast diversification with its various strategies, out of which the most common, direct lending, accounts for 40% of the US private credit market.

Overall, private credit stands out due to its highly customizable terms as well as covenants tailored case by case to fit both lenders and borrower’s requirements. This flexibility allows private credit to distinguish itself not only as an alternative but a critical pillar in today’s growing capital markets.

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BSAMC_x_I_Circle__The_Rise_of_Private_Credit_26_April_2025.pdf

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