Private credit glossary

Private credit glossary

The 10 debt structures a borrower meets in private credit, each defined in one sentence and linked to how it works, when borrowers use it, and the lenders that offer it.

What is senior debt

Senior debt is the highest-priority loan in a company's capital structure — first in line to be repaid if anything goes wrong — which makes it the cheapest form of private credit a borrower can raise.

What is a unitranche loan

A unitranche loan blends senior and subordinated debt into a single facility with one blended interest rate, giving a borrower one lender, one set of documents, and a faster close than a two-layer structure.

What is mezzanine debt

Mezzanine debt is subordinated capital that sits between senior debt and equity — higher-cost than senior debt but cheaper than dilution, often carrying an equity kicker such as warrants.

What is bridge financing

Bridge financing is short-term debt — typically 6 to 24 months — that funds a borrower until a specific longer-term event happens, such as a refinance, sale, or equity raise.

What is venture debt

Venture debt is term debt for venture-capital-backed companies that extends runway between equity rounds without additional dilution, underwritten against the investor syndicate and growth trajectory rather than current cash flow.

What is asset-based lending (ABL)

Asset-based lending is debt secured by specific business assets — receivables, inventory, equipment, or other collateral — with the borrowing base recalculated as those assets change, letting companies borrow against what they own rather than only what they earn.

What is project finance

Project finance is long-term debt raised against a single infrastructure or energy project's own contracted cash flows, with limited or no recourse to the sponsor's balance sheet.

What is equipment finance

Equipment finance is debt secured by the machinery, vehicles, or hardware being purchased — the equipment itself is the collateral, which lets companies fund essential assets while preserving other credit lines.

What is real estate debt

Real estate debt is lending secured by property — mortgages, bridge loans, and construction facilities underwritten against the property's value and income rather than the borrower's operating business.

What is a revolving credit facility

A revolving credit facility is a reusable credit line a borrower can draw, repay, and redraw as needed — the corporate equivalent of a credit card for smoothing working capital.

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