Pricing
Private credit pricing in 2026
What borrowers should expect to pay by deal structure, size, and risk profile. These are market ranges — your actual pricing depends on credit quality, competition, and timing.
| Structure | Spread | All-in |
|---|---|---|
| Senior Secured | SOFR + 400–550 bps | 8–10% |
| Unitranche | SOFR + 500–700 bps | 9–12% |
| Second-Lien | SOFR + 700–900 bps | 11–14% |
| Mezzanine | 12–18% total return | 12–18% |
| Asset-Based (ABL) | SOFR + 250–400 bps | 6.5–8.5% |
Senior Secured: Lowest-cost private credit. First-lien on assets. Lowest risk, lowest return for lenders.
Unitranche: Single facility combining senior and subordinated. One set of documents, one lender. Most popular middle-market structure.
Second-Lien: Behind the first-lien lender. Higher risk, higher return. Often used to stretch total leverage beyond what a unitranche lender will provide.
Mezzanine: Unsecured or deeply subordinated. Often includes equity kickers (warrants). Most expensive but most flexible — few covenants.
Asset-Based (ABL): Secured by receivables, inventory, or equipment. Cheapest option when hard assets exist. Common in manufacturing, distribution, retail.
What moves pricing
Deal size
Larger deals ($100M+) get tighter spreads because more lenders compete. Smaller deals ($10-25M) pay a premium — fewer lenders play in that range.
Sponsor backing
PE-backed companies typically get 50-100 bps better pricing than founder-owned. Sponsors bring financial discipline, reporting, and an equity cushion.
Industry
Stable industries (healthcare, software, business services) get better pricing. Cyclical or volatile industries (energy, retail, construction) pay a risk premium.
Leverage
Every turn of leverage above 4x typically adds 25-50 bps to the spread. Above 6x, the market thins significantly — fewer lenders, higher pricing.
Competition
Running a competitive process with 15+ lenders typically improves pricing by 50-100 bps vs. negotiating with one. Lenders sharpen terms when they know others are looking.
Disclaimer
These are indicative market ranges based on publicly available data and deal experience, not quotes. Actual pricing depends on your specific deal, credit profile, and market conditions at the time of close. Speak with a banker for current market terms.
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