What is private credit?

Private credit refers to loans made by non-bank lenders, such as private equity firms, hedge funds, or direct lending platforms, to businesses seeking financing. These loans are not traded on public markets (like bonds), and the terms are negotiated directly between the lender and the borrower. Private credit usually offers more flexible terms in return for higher interest rates, and can include different types of debt like senior secured loans or mezzanine financing that vary in risk-return profile.