Five Themes Reshaping Private Credit

Hi there, and welcome to the June 2026 edition of The Funding Outlook! 

This month, we’re taking a closer look at how private credit is evolving. While headlines may suggest caution, the reality is far more nuanced. Capital continues to flow across regions and sectors, acquisition activity remains robust, refinancing pipelines are expanding, and growth capital is still available. Yet beneath the surface, several structural shifts are quietly changing how lenders evaluate businesses, how transactions are structured, and what founders need to do to access financing. 

Private credit is no longer defined by scarcity. It is increasingly defined by selectivity. Access to capital alone is no longer enough. Preparation, resilience, and thoughtful structuring are becoming the factors that separate businesses that secure attractive financing from those that struggle to do so. 

For businesses preparing to enter funding discussions, our Debt Readiness Checklist outlines some of the areas lenders are increasingly focusing on during underwriting and diligence.  

Here are five themes shaping the second half of 2026.

1. Selectivity is increasing, not retreating

Private credit has expanded significantly over the past decade and is now estimated to represent more than US$3 trillion globally. While the market continues to grow, lenders are becoming increasingly selective in where and how they deploy capital. 

Recent trends point to slower issuance in parts of the direct lending market, accompanied by renewed scrutiny around leverage levels, pricing, and covenant protections. Investors are placing greater emphasis on liquidity, transparency, and downside resilience, reflecting a broader shift towards quality rather than volume. 

As a result, lenders are paying closer attention to factors such as cash flow visibility, operational reporting, customer concentration, sector exposure, and governance standards. The distinction between businesses seeking capital and those that are genuinely prepared to deploy it effectively has never been more important. 

Businesses entering funding processes without strong reporting visibility or liquidity planning are finding lender scrutiny becoming increasingly rigorous. Our article, 8 Things Lenders Actually Look For When Evaluating a Business for Debt Financing, explores many of the themes shaping underwriting decisions today.

2. Structure is becoming more important than pricing

Although the cost of capital remains an important consideration, borrowers are increasingly recognising that flexibility and certainty often matter more than securing the lowest headline price. 

Today's lenders are differentiating themselves through bespoke covenant packages, tailored repayment profiles, and structures designed to support growth, acquisitions, refinancing initiatives, or periods of market volatility. 

Across founder-led businesses, acquisition financing, cross-border transactions, and shareholder liquidity events, the cheapest capital is rarely the most strategic. Businesses that demonstrate operational clarity and undertake scenario planning are typically achieving better outcomes because they are approaching financing as a long-term strategic tool rather than simply a cost exercise. 

As businesses navigate acquisitions, growth initiatives and shareholder events, capital structure is increasingly becoming a strategic lever rather than simply a financing consideration. Our Private Debt vs Venture Debt vs Bank Debt Comparison Guide explores how different forms of capital can support different objectives.

3. AI enthusiasm is being matched by underwriting discipline

Artificial intelligence remains one of the strongest themes attracting capital globally. Morgan Stanley estimates that AI-related debt issuance could exceed US$570 billion in 2026, highlighting the scale of investment flowing into infrastructure and software ecosystems. 

However, lenders are becoming increasingly disciplined in how they evaluate exposure to the sector. Rather than being driven by narrative alone, they are focusing on commercial viability, customer retention, operating costs, and the credibility of profitability assumptions. 

A distinction is beginning to emerge between businesses that are merely AI-enabled and those whose economics are heavily dependent on AI adoption. For lenders, real operational traction and sustainable growth metrics continue to matter far more than market excitement. 

Explore how capital is flowing across emerging sectors and technologies in our Industry Insights ->

4. Refinancing discussions are starting earlier

One notable shift in the market is the increasingly proactive approach businesses are taking towards refinancing. Rather than waiting for debt maturities to approach, many companies are beginning discussions 12 to 24 months in advance. 

This earlier engagement is allowing management teams to think beyond simply replacing existing facilities. Instead, refinancing conversations are increasingly being used as an opportunity to optimise capital structures, introduce greater flexibility, diversify lender relationships, and secure additional growth capital where required. 

Businesses that begin these conversations early preserve valuable strategic optionality. Those that delay often find themselves operating within narrower timelines and under greater scrutiny. 

Refinancing conversations are increasingly becoming broader strategic discussions around capital allocation and long-term growth. See how businesses are using structured capital to optimise existing facilities, improve flexibility, and position themselves for future growth. 

Explore Refinancing Solutions →

5. Cross-border capital is becoming more sophisticated

Private credit is becoming progressively more global, but international transactions are also becoming more complex. 

Across Europe, founder-led businesses continue to pursue acquisitions and refinancing opportunities despite tighter underwriting standards. In the United States, competition among lenders remains strong, enabling high-quality borrowers to access attractive terms while others face more structured negotiations. Meanwhile, Singapore and broader APAC markets continue to strengthen their position as hubs for structured financing across sectors such as technology, healthcare, logistics, and industrials. 

As cross-border activity increases, factors such as currency exposure, local regulations, jurisdictional nuances, and lender alignment are becoming increasingly important. In this environment, advisory expertise is proving to be just as valuable as access to capital itself. 

Perhaps one of the biggest shifts taking place is that businesses no longer need to be multinational to think globally. As operations, customers and revenue streams increasingly span borders, the quality of advice and access to capital must evolve alongside them. In oue latest blog, Russell Lerman examines why international capability is becoming a baseline requirement for ambitious mid-market businesses rather than a premium add-on. 

Read: Cross-border Capital Advisory →

Further Perspectives

Beyond the themes shaping private credit, several broader shifts are influencing how founders, businesses, and advisers think about growth, liquidity, and execution.

Have We Hit Peak Big 4? The Changing Shape of Advisory

For decades, the world’s largest advisory firms have set the standard for expertise, training, and execution, building generations of exceptional talent. 

But is the advisory model itself reaching an inflection point? 

As the lower mid-market evolves, ambitious businesses increasingly need institutional-quality advice delivered through a more agile, specialist model built around their needs. 

At the same time, AI and technology are changing what focused teams can achieve, enabling specialist firms to combine deep expertise, efficiency, and client focus in new ways. 

In a recent article authored by our CEO, Russell Lerman, we explore why advisory is evolving, what this shift means for the industry, and how firms like Fuse Capital Group are building for this next chapter. 

Read the full article → 

Is There Capital Hidden Inside Your Shareholding?

For many founders, significant wealth sits inside the businesses they have spent years building. Yet while valuations may have increased, much of that value remains difficult to access without selling shares or pursuing an exit. 

Increasingly, specialist lenders are changing that conversation. 

Share-backed lending is opening up new possibilities for founders seeking liquidity, acquisitions, shareholder buyouts, or wealth diversification, without necessarily giving up ownership. 

Not every business will qualify, and not every situation will lead to this particular solution. But the bigger story is perhaps a more important one: the range of capital options available to founders continues to expand. 

In our latest article, we explore why many business owners are only beginning to discover the opportunities sitting within their own balance sheets. 

Read: Your Shares Are Worth Millions. Most Founders Have No Idea They Can Borrow Against Them →

Market Watch

Fundraising remains resilient: Leading managers continue to attract significant commitments, with Ares recently closing its US$8.5 billion Pathfinder Fund, underscoring investor confidence in the asset class.  

Regulatory focus: Greater scrutiny of liquidity management, valuation practices, and interconnected risks is becoming permanent.  

Infrastructure themes: Private capital continues to fund digital infrastructure and energy transition, creating opportunities that extend well beyond the current cycle.  

Explore previous editions of The Funding Outlook: Newsletter Archive

Implications for Businesses

The private credit market remains active but is becoming increasingly discerning. Businesses with strong reporting frameworks, realistic growth assumptions, thoughtful liquidity planning, and well-structured capital strategies continue to access attractive opportunities. 

The gap between capital availability and accessibility is widening. Those achieving the strongest outcomes are not necessarily the loudest. They are the best prepared. 

Navigating a more selective market requires more than access to capital. It requires thoughtful structuring, preparation, and execution. Whether evaluating growth capital, acquisitions, refinancing, or international expansion, businesses increasingly benefit from advice aligned with their long-term objectives. 

For businesses considering their next strategic move, we work with founders, management teams, and sponsors to design and execute tailored capital solutions across global markets. Speak with Our Investment Advisory Team

Looking Ahead

Private credit is no longer a race to access capital. It is increasingly a test of readiness. Ambition still attracts interest, but structure, preparation, and clarity of execution are what ultimately unlock opportunities. In a market defined by selectivity rather than scarcity, these qualities are likely to become even more important in the months ahead. In today's market, ambition still attracts capital. But preparation is what unlocks it. 

Stay Connected 

We'll continue bringing you perspectives on the themes shaping private credit, structured financing, international expansion, and global capital markets.