What Is Private Credit?
Private credit refers to business financing provided by non-bank lenders and private capital sources rather than traditional banks. It's a broad category that can include term loans, asset-based facilities, receivables financing, merchant cash advances, and other customized structures designed around a business's assets, cash flow, and specific situation.
Because private credit providers aren't bound by the same standardized guidelines as conventional banks, they may evaluate a wider range of factors and structure financing around the actual transaction — rather than fitting the business into a preset product box.
- Alternative to traditional bank financing when speed or flexibility matter
- May be available for businesses that don't fit conventional bank boxes
- Can support refinancing, growth, acquisitions, or working capital
- Asset-based and receivables-based structures may be available
- Terms are structured around the business's assets, cash flow, and situation
How Private Credit Differs From Traditional Bank Financing
Traditional Bank Financing
- Standardized underwriting guidelines
- Regulated capital requirements
- Longer approval and closing timelines
- Narrower credit boxes
- Preset product structures
Private Credit
- Flexible, situation-specific underwriting
- May evaluate assets, cash flow, contracts
- Often faster execution
- May finance situations banks decline
- Customized structures available
Costs, terms, and availability vary significantly by provider and transaction. Private credit is not inherently better or worse than bank financing — it's a different tool for a different situation.
When Businesses Explore Private Capital
Businesses commonly explore private credit when:
- They need capital faster than a bank can deliver.
- They don't meet a conventional bank's credit or time-in-business criteria.
- They're carrying short-term obligations — like multiple MCAs — they want to restructure.
- A transaction requires a customized structure a standard product doesn't fit.
- They have strong assets or receivables but uneven financials.
Asset-Based & Receivables-Based Options
Within private credit, two common structures use a business's own assets as the basis for financing:
Asset-Based Financing
Financing secured by a business's assets — equipment, inventory, real estate, or other collateral. The advance size and terms may be tied to the value and quality of those assets.
Receivables-Based Financing
Financing tied to outstanding invoices or future receivables, including invoice factoring and merchant cash advances. Availability may depend on the strength and consistency of the receivables.
Learn more about Merchant Cash Advances and how they compare to business term loans.
Qualification Considerations
Qualification for private credit varies by provider and structure, but commonly reviewed factors include:
- Business revenue and cash flow
- Time in business
- Credit profile of the business and guarantors
- Quality and value of available assets or receivables
- Existing obligations and debt structure
- Bank activity and consistency of deposits
- Overall financial condition
Frequently Asked Questions
Private credit refers to business financing provided by non-bank lenders and private capital sources rather than traditional banks. Structures can include term loans, asset-based facilities, receivables financing, and other customized arrangements, often with more flexible underwriting than conventional bank loans.
Traditional bank loans typically follow standardized underwriting guidelines, regulated capital requirements, and longer approval timelines. Private credit providers may evaluate a wider range of factors — assets, cash flow, contracts, receivables — and can sometimes move more quickly or finance situations a bank may decline. Terms, costs, and structures vary by provider.
Businesses often explore private credit when they need faster execution, when they don't meet conventional bank criteria, when they're carrying short-term obligations they want to restructure, or when a transaction requires a customized structure that a standard bank product doesn't fit.
No. A Merchant Cash Advance is one specific type of alternative financing, typically structured as a purchase of future receivables. Private credit is a broader category that can include many different structures beyond an MCA.
No. Submitting information does not guarantee approval or funding. Financing is subject to underwriting, eligibility, and approval.
Explore Private Capital Options
Submit your information and our team will review which available private credit structures may be appropriate for your business.
Financing is subject to underwriting, eligibility, and approval. Products and availability vary. Submitting information does not guarantee approval or funding.