Private Credit

Definition ∞ Private credit refers to debt financing provided by non-bank lenders to companies. This form of lending typically involves direct negotiation between the borrower and the lender, outside of public markets. It often serves businesses that may not qualify for traditional bank loans or public debt offerings. The terms are generally customized to the specific needs of the borrower.
Context ∞ The emergence of private credit as an asset class has significant implications for traditional finance and increasingly intersects with digital assets. News reports may discuss institutional investors allocating capital to private credit funds or the tokenization of private credit assets. The interplay between private credit markets and the broader financial system, including its potential impact on liquidity and risk, is a subject of ongoing analysis. Its role in providing capital to businesses is a key consideration.