Private credit glossary · 2026
Private credit vs. bank lending: what’s the difference?
Private credit is lending from specialized non-bank funds rather than regulated banks — it costs more than a bank loan but closes faster, flexes to the deal, and reaches borrowers banks can’t serve.
| Bank lending | Private credit | |
|---|---|---|
| Capital source | Regulated bank balance sheets, deposits | Specialized funds (pension, endowment, insurance capital) |
| Speed to close | Weeks to months; committee-driven | Days to weeks; investment-team driven |
| Structure flexibility | Standardized; strict covenants | Bespoke: unitranche, PIK, delayed draw, covenant-lite |
| Price | Cheapest debt available | Premium of roughly 2–5 points over comparable bank debt |
| Borrower fit | Strong credit history, hard collateral, profitability | Complex, leveraged, fast-moving, or story-driven credits |
| Relationship | Often transactional, regulated oversight | Direct, fewer stakeholders, decisions by the deal team |
By the numbers — live from this site's dataset
- 1,557 total active lenders tracked
- 1,340 non-bank private credit funds
- 217 bank-affiliated lenders
- 31 funds that close in 30 days or less
The private credit universe is 6x larger than the bank-lender subset. Updated daily.
When bank lending makes sense
- ✓ Strong, profitable companies with 3+ years of operating history
- ✓ Low leverage (under 3x debt-to-EBITDA) with hard collateral
- ✓ Non-urgent timelines — 60–90 day closing is acceptable
- ✓ Standardized capital structures: senior secured, revolving credit
- ✓ Cost is the primary concern — bank debt is the cheapest available
When private credit wins
- → Speed matters — you need a term sheet in days, not weeks
- → Structure matters — you need unitranche, delayed-draw, PIK, or covenant-lite
- → Leverage is higher than banks allow (4x+) but cash flows are strong
- → You're in an industry banks avoid: software, healthcare services, sponsor-backed
- → Certainty of close is worth the rate premium — the deal must happen
Common questions
Is private credit more expensive than a bank loan?
Yes — typically 2–5 percentage points more than comparable bank debt. Borrowers pay the premium for speed, certainty, flexibility, or simply access when banks can't do the deal.
Why do companies use private credit instead of banks?
Four reasons: speed (closes in days-to-weeks), certainty (fewer committees), flexible structures (unitranche, delayed draw, covenant-lite), and access — banks often can't underwrite leveraged, complex, or fast-moving borrowers.
How big is the private credit market?
This site's database tracks 1,557 active private credit funds (live count). Among the 124 direct lenders whose check size is confirmed from a published source, the median range is $7M to $50M. This site's database is built for middle-market raises, not mega-deals.
Browse 1,557 lenders by structure
Senior, unitranche, mezzanine, ABL and more — with check sizes and sectors.
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