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 |
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?
The Agentas database tracks 2,236 active private credit funds as of July 2026, with the median direct-lender check-size band around $10M–$100M — the market's center of gravity is the middle market, not mega-deals.
Browse 2,236 private credit funds by structure
Senior, unitranche, mezzanine, ABL and more — with check sizes and contacts.