The private credit industry—which offers nonbank loans directly to businesses, particularly privately held midmarket companies—grew from a $250B asset class in 2010 to around $1.5T in early 2024.

The private credit industry offers nonbank loans directly to businesses, particularly privately held midmarket companies.

Borrowers were increasingly defaulting on private credit loans as of early 2026

Risks in private credit investing include the industry's lack of transparency and the ability of businesses to borrow more than a bank might allow against their debt. Some borrowers in early 2026, for instance, likely did not expect interest rates to be so high for so long, which could be contributing to an uptick in defaults.

Private credit is a nonbank loan made directly to a business

Similar to private equity, private credit is part of the private markets world. Both strategies offer illiquid, privately negotiated investments for privately held companies. Unlike private equity investors, however, private credit investors typically do not take ownership stakes in the companies they invest in.

Why private credit is attractive to both businesses and investors

While investors are attracted to the high rates, private credit is particularly attractive to mid-sized businesses that are too small for bank syndication and want faster, more flexible financing options.

Why private credit has faced challenges in recent years

The factors that some experts say are driving what could be private credit's most challenging era since the 2008 financial crisis include global economic uncertainty around trade and tariffs, investor fears about the amount of money being spent on artificial intelligence, and more.

'Floating rate' loans periodically adjust their interest rates in accordance with economic conditions

When the Federal Reserve began raising interest rates in 2022 to combat inflation, interest payments borrowers owed to private credit lenders increased accordingly. Private credit funds benefited as loan returns increased, making the asset class attractive to investors at the time.

Direct lending is the most common form of private credit

Other types include opportunistic credit, special-situations credit, mezzanine finance, venture debt, infrastructure debt, real estate debt, and more. All of these sources of capital technically create private transactions, so they can all call themselves private credit.

Retail investors cannot directly invest in private credit funds—but other financial vehicles can offer exposure to the industry

For example, as some US regulations have loosened in recent years, retail investors have begun to get exposure to the private credit market via ETFs that invest in publicly traded financial vehicles with private credit exposure, such as BDCs.

Private credit and private equity are both alternative assets

Like private equity fund managers, private credit managers typically raise funds directly from investors, lending to corporations. The borrowers can benefit from the lack of middlemen and resulting efficiency, and the lenders often yield comparatively higher returns.

Some semi-liquid private credit funds saw a surge in investor redemptions in early 2026

This raised red flags about the state of the private credit market at large. However, experts have cautioned that the idea that private credit is on the verge of collapse is overstated.

Cheap debt and relatively minimal regulation have fueled private equity's expansion in recent years.

Direct lending typically involves 'senior loans'

Direct lending, the most common subtype of private credit, typically involves senior loans which are secured by a company's assets. "Junior capital," on the other hand, is a type of private credit that is not secured by a company's assets, making it generally riskier than direct lending.

Find out ways to get lower rates on private loans, such as applying with a cosigner.

Family offices have been increasing their allocations to private credit

Private firms that manage family fortunes have been investing more in alternatives like venture capital and real estate, impacting the wider financial world.

Some private credit funds trade on the stock market

These funds, which trade at market prices, are called "public BDCs," which stands for "business development companies." For instance, the global alternative investment manager Ares Management Corp. has a public BDC.

Before the modern banking system, most lending resembled private credit

Before the creation of the modern banking system, the majority of loans were negotiated directly between the lender and the borrower—effectively making them private credit transactions.

Why Americans are drowning in credit card debt

Americans owe more than $1T to credit card companies. And with rising interest rates that prevent cardholders from paying down debt (not to mention the rising cost of living), that number is likely to keep growing. A podcast episode explains how the US got here, and what policymakers and individuals can do about it.

Banks have increased small loan programs since 2018, upping competition for payday lenders

One of the reasons payday lending flourished for nearly two decades is that most banks charged high overdraft fees and didn't offer small loans. However, since 2018, banks have increased their small loan options. Supporters say this provides safer alternatives for consumers, as banks are subject to more regulatory measures and are less likely to allow consumers to keep rolling over loans.

Apollo Global Management and Blackstone are among the world's top 20 private credit fund managers

While Blackstone is the world's largest alternative asset manager, Apollo Global Management is a large private equity firm. Apollo had $480B in private credit assets under management as of January 2025.

From 2014-25, US private sector data center investments have increased more than 25-fold

The annualized rate of US data center construction has ballooned from $1.6B to $41.1B, creating a market for data centers whose infrastructure costs and land, power, and transmission capacity demands rival those of offices and industrial facilities.

Student loans are typically just one part of a college student's overall financial package that will often include other categories as well, such as grants, scholarships, merit-based awards, and more.

Some institutional investors are growing wary of private equity, as certain investments underperform traditional market indices

Private equity often attracts investors who can afford to tie up capital for long periods of time in exchange for higher returns than traditional investments. For many years, private equity at least tracked with the S&P 500 in terms of returns to investors, but in 2024 and 2025, it underperformed and posted declining returns.

The alternative investments industry is expected to grow significantly in the coming years

More specifically, as of 2024, the alternative investments industry was expected to grow to more than $24T in assets in 2028—up from roughly $15T in 2022.

The fintech industry was worth roughly $340B as of 2025

Venture capitalists have been bullish on the industry’s future in recent years, too. Some estimate that global investment in fintech increased by 12,000% between 2008 and 2020.

Investors collectively owned $28T in US Treasury securities as of 2025.

The stablecoin market increased tenfold from 2020 to 2025

Specifically, the stablecoin market grew from about $28B in 2020 to $282B in 2025. Some experts forecast that it could grow anywhere from 6.7x to 14.2x by 2030.

Different CDs can have different term lengths, interest rates, and more

For instance, if a bank needs more deposits to fund loans, then it may offer high interest rates to attract deposits. Alternatively, a large bank with sufficient deposit reserves may have less incentive to grow its CD portfolio, offering lower rates as a result.

Nearly half of billionaires planned to increase exposure to direct private equity investments in 2026.

Credit reporting started as a service for businesses rather than consumers

In the 1700s US economy, consumer credit reporting wasn't necessary. A loan to a farmer for agricultural supplies, for instance, would inevitably help them purchase both personal and business items.

In 2024, US private equity posted an 8.1% return

Tracked by Cambridge Associates, 2024 performance saw limited partner distributions overtake contributions for the first time in years. Cambridge Associates, a leader in the space, typically uses a 2.0x+ MOIC (Multiple on Invested Capital) as a benchmark for top-quartile PE fund success.

What are business credit scores?

Businesses have credit scores the same way individuals do—with a few key differences. For one thing, business credit scores range from 0 to 100 instead of 300 to 850, and are based on factors such as bankruptcy and bill-paying habits.

Historically, borrowing money from other people to purchase property was common until private financing companies—primarily building and loan associations—stepped in to offer mortgages to buyers.

Pension funds' allocations to risky, alternative investments increased by 25% between 2001 and 2021

The portion of pension funds' risky investments, including alternative investments such as private equity, increased from 14% in 2001 to 39% in 2021. Analysts say private equity investments have delivered higher returns than traditional assets like stocks and bonds. Increased investment in private equity has also given pensions a way to recover from the 2008 financial crisis without necessarily investing more money.

Subprime lending practices, which fueled the housing bubble, surged after 2000.

See the growth of US consumer debt

Americans reached an all-time high debt burden in 2024. Data compiled from The Kaplan Group shows the evolution of auto loans, mortgages, credit card debt, and student loans from 2003 to 2023, and finds that after a brief decline after 2008, the total debt burden grew rapidly.

Use this student loan calculator to estimate monthly student loan payments.

Consumers will use digital payment processing for nearly $40T in spending by 2028

That's just one signal of the industry's massive growth. Investments in the global fintech industry have grown from $4B in 2010 to $92.3B in 2021, as both businesses and consumers seem to quickly adopt new fintech products, from digital payment apps to robo-advisers.

BNPL has 19th-century roots, but the pandemic made it mainstream

The modern BNPL model didn't take off until the COVID-19 pandemic, when consumers were stuck at home and lockdowns forced them to shop online rather than in person. The number of US BNPL loans grew more than tenfold from 2019 (16.8 million) to 2021 (180 million), according to a Consumer Financial Protection Bureau report.

Why consumers could soon see the impact of buy now, pay later loans on their FICO credit scores

FICO rolled out its first-ever BNPL-specific credit scoring models in June 2025. While missed installments can now negatively impact a credit score, there's also the potential for on-time BNPL installment payments to help boost scores.

In 2023, venture capital firms invested $170B in over 15,000 US companies

That's a significant drop from 2022’s $242B, reflecting market uncertainty but continuing VC’s role in scaling transformative ideas. Rooted in early risk-sharing models, venture capital took off with firms like ARDC in 1946, later evolving into today’s influential players like Sequoia Capital and Andreessen Horowitz.

Facts and figures on the largest credit unions

As of early 2024, credit unions had $2.31T in assets under management and were growing exponentially. Some of the biggest players limit access to military personnel, residents of specific states, and those with active religious affiliations. If you want to bank with some of the top names in the US, this list will help you check to see if you qualify.

In 2025, the US credit rating was downgraded over concerns about the debt-to-GDP ratio.

The first private equity fund was launched in 1960

At the time, the industry—and the public's understanding of it—was rather limited, and few private equity firms existed until the 1980s. The first leveraged buyout is thought to have taken place in 1955.

Payday lenders spent more than $5M on lobbying efforts in 2025

Payday lenders largely oppose rate cap policies, increased borrower risk-assessment requirements, and other regulations that would effectively shutter their industry. In 2025, the payday lending industry lobbied against interest rate limits on payday loan apps.

For everyday Americans, a relatively high national debt can lead to higher interest rates on financial products such as mortgages.

Private equity's expansion into healthcare has been criticized for raising patient medical costs

Between 2000 and 2018, PE's total investment in healthcare ballooned from $5B to $100B. While healthcare systems originally began consolidating as a solution to navigating complex regulations (and to make working with insurance companies easier), research suggests that private equity has both increased patient costs and decreased the quality of care in hospitals and doctors' offices.

Certificates of deposit are low-risk savings tools that offer a stable way to grow your money over time.

Credit cards were the fourth-highest source of US consumer debt as of 2024

US consumer debt nationwide totaled $17.9T as of 2024 Q3. Mortgage debt ranked as number one, with student loan debt coming in at number two.

Before the Great Recession, lax requirements to get a mortgage resulted in mass defaults that left nearly 19 million homes vacant.

Private equity is viewed as an alternative investment

These different types of private equity include venture capital, growth equity, and buyouts.