What the Private Credit Boom Actually Means If You Are the Borrower

The market has been covered extensively for investors. Almost nobody explains it from the other side of the table.

Every article written about private credit for the last three years has been addressed to the same reader: the investor. How much capital is flowing in? Are returns compressing? What is the regulatory risk?

I have spent most of my career on the other side of that equation. I co-founded a specialty lending company in 2009, built it into a platform originating loans across multiple states, and spent over a decade managing relationships with both borrowers and the institutional capital partners funding them. Later I served as Managing Partner at a consumer lending company before moving into private credit investing and fund management at Link Capital.

What I noticed throughout all of that is that borrowers are consistently underprepared for private credit conversations. Not because they are unsophisticated. Because nobody explains the market to them.

Why this market exists

Private credit is not a new idea. It is a new scale. Lending outside the traditional bank channel has always been around. After 2008 post-crisis regulation made a wide range of lending categories substantially less attractive for deposit-taking banks to hold on their balance sheets. Capital reserve requirements went up. Standardized underwriting frameworks tightened. The middle market, specialty finance, and asset-backed lending to non-standard borrowers became harder for banks to execute profitably.

That dynamic accelerated sharply in 2023. Silicon Valley Bank, Signature Bank, and First Republic collapsed within weeks of each other. Those three institutions were meaningful capital sources for specific borrower segments. Their failure removed that capital quickly, and borrowers in those segments had to find alternatives, often under time pressure.

Private credit moved into that space. The institutional capital was already there. The borrower demand was already there. What the market built over fifteen years was the infrastructure to deploy at scale.

What the underwriting conversation actually is

The most common mistake I see borrowers make when approaching private credit lenders is treating it like a bank process.

In a bank process, you submit financials, meet a checklist, and wait for a decision. The conversation is short. The relationship is transactional. You either qualify or you don’t.

Private credit is different in character. The lender is not running your numbers through a scoring model. They are underwriting your business: the durability of the cash flow, the quality of the collateral, the alignment between the loan structure and how the business actually operates. The process involves more diligence, not less. And the quality of the conversation matters in a way it simply does not in a bank application.

I have sat across the table in hundreds of these conversations, on both the borrowing and the lending side. The borrowers who perform well are not the ones with the cleanest presentations. They are the ones who understand their own risk clearly and can articulate how the structure accounts for it. A borrower who can explain a difficult year, specifically and honestly, is more credible than one who has polished the story into something that raises questions.

The ones who struggle are the ones who present what they think the lender wants to see. Private credit lenders have seen every version of that. What they are actually looking for is a borrower who understands their business well enough to be a reliable capital partner over the life of the facility.

What transparency actually accomplishes

When I was building our lending platform, we made a deliberate choice to look beyond the standard credit scorecard for a large segment of our borrowers. The traditional models did a poor job evaluating people with thin credit histories or who had experienced specific events that their scores did not put in context. The underlying credit quality was often there. The scorecard just could not see it.

Private credit operates on a version of that same logic at the institutional level, applied to businesses rather than consumers. The standard bank checklist is not the evaluation. The evaluation is whether the lender understands the risk well enough to structure around it.

Your job as a borrower is to make that risk legible, not to minimize or conceal it. Be specific about your collateral and what it is worth in a stress scenario. Be direct about your cash flow and where its vulnerabilities are. Show that the structure you are asking for fits the business you are actually running, not the business you wish you were running.

That kind of transparency is not naive. It is what closes deals.

The practical point

If the bank market has declined your deal, priced it prohibitively, or offered structure that does not fit your business, the private credit market is worth engaging with seriously. It is not a last resort. It is a structurally different lending environment with different underwriting logic, more flexibility on structure, and different expectations about the borrower relationship.

Knowing that distinction before you walk in the room is the most useful preparation you can do.

Emre Ucer is Managing Partner of Link Capital, a Los Angeles-based private credit and fund management firm. He has spent over twenty years working across consumer lending, credit facility structuring, and institutional capital markets. He writes on capital markets and lending at emreucer.com.