How The 2008 Credit Crisis Changed the Landscape for Private Debt

The 2008 credit crisis changed the landscape for private debt opportunities which has resulted in an institutional asset class for investors looking for yield. Banks were forced to reduce their balance sheets, and were also tasked with adjusting to new capital requirements. These changes have significantly reduced the ability of banks to lend to middle-market companies, and have created an opportunity for non-traditional lenders to address this market dislocation.

The middle market company with good cash flow, strong balance sheet, growing business lines, and disruptive technology may find the process of loan origination long and arduous, with lowered expectation of a successful outcome.  New lenders have stepped in via marketplace lending platforms, direct lending, and private debt funds.  We have found that many companies in the lower middle market, especially companies driven by successful hard-charging entrepreneurs, want a lender that is simply easy to work with!