Investing
Private credit
Loans made by non-bank lenders directly to companies, outside public bond markets.
Also known as: direct lending, private debt
Updated June 2026
Private credit is lending to businesses by funds and institutions rather than banks or public bond markets. It has grown from a niche into one of the fastest-expanding corners of global finance.
Why it boomed
After 2008, banks pulled back from riskier lending. Funds stepped in, offering borrowers speed and flexibility, and offering investors higher yields than public bonds.
The trade-off
Higher yield comes with illiquidity — your capital is locked up — and less transparency than public markets. Valuations are estimated, not quoted minute-to-minute.