Private Credit – An Alternative To Bank Financing

In recent years the global loan market has seen a shift from traditional bank lending towards private credit. Private credit has also gained increasing popularity in Finland, where corporate finance has traditionally been based on relationship banking.

What is private credit, and why has it become so popular?

Also known as direct lending, private credit is financing provided directly to a company by a non-bank lender such as a private credit fund.

Economic uncertainty and increased regulatory requirements have led banks to become more risk-averse and traditional bank financing has become more difficult for some companies to obtain. This has resulted in an increased demand for alternative sources of financing, allowing providers of private credit to gain market share from banks.