The rise of private credit: How private lending is reshaping finance
Written by Paul Ward from Blue Star Business Finance
Private credit finance has quickly become a major part of the UK’s financial landscape.
Its expansion has changed the ways in which businesses approach funding and is creating opportunities beyond traditional banks and lenders.
But what is actually fuelling this growth? Let’s take a look at some of the most important factors behind the shift.
The increased demand for flexible business finance
One major driver behind the rise of private credit is the increased demand for flexible funding options.
Traditional financial institutions tend to have more rigid lending criteria; they can also hamper you with extensive paperwork and slow decision-making processes.
Conversely, private credit offers more bespoke terms tailored specifically to a business’s unique requirements.
Companies today need quick access to funds if they’re going to seize opportunities promptly, which makes agility a top priority.
You can also usually get decisions made faster
Speed has always been an important factor in commerce, but in the modern world, it’s even more crucial.
Businesses often need to move rapidly to secure competitive advantages.
Private credit firms are typically smaller and more agile compared to banks, which means you can sit down with them and get to grips with what you need and when you can get it, much faster.
This accelerated process is perfect for businesses looking to secure timely funding, driving greater interest in private financial services.
Support for growing SMEs and mid-market firms
Small and medium-sized enterprises (SMEs) and mid-market firms are some of the cornerstones of the UK’s economy, but they often face barriers when accessing traditional bank financing.
Business loan finance and revolving credit facilities are often better positioned to support these sectors by offering unsecured loans secured against business assets or tailored business asset finance solutions.
A volatile global market encourages diverse finance options
Global economic volatility is something the business finance sector has been experiencing for some time, and it’s not set to change anytime soon.
This has underscored the importance of diversifying financial sources, as relying solely on traditional banking channels has become riskier.
As a consequence, businesses are seeking funding that has a human being underwriting the deal rather than relying on a machine or AI.
Businesses and financial advisors tend to show a greater knowledge of alternative finance options and are clearer with their clients and partners about the benefits and possibilities offered by alternative funding.
This enhanced understanding has reduced previous hesitancies or scepticism, driving more businesses towards these innovative funding solutions.
Compelling returns and attractive terms
Unsecured business loans often present more attractive terms compared to traditional bank-oriented finance options.
Repayment schedules are frequently more aligned with a company’s cash flow patterns.
How Bluestar Business Finance can support your asset finance needs
Bluestar Business Finance part of the Manx Financial Group formed as part of Conister Bank formed in the 1935.
Paul Ward, head of professionals has over 15 years experience specialises in tailored loan solutions designed to help businesses thrive.
We have a deep understanding of many diverse industries and a real commitment to person-centred customer care.
If you want to find out more about how we can help your business, get in touch with Paul Ward at Paul.ward@bluestarbusinessfinance.co.uk