Fuse Capital Editorial TeamJuly 202610 min read

Navigating the 2026 Private Credit Landscape

July has already proven to be a significant month for businesses operating across the UK and India.

The landmark India-UK Free Trade Agreement is expected to strengthen bilateral trade, improve market access and unlock new cross-border investment opportunities. At the same time, institutional appetite for private credit continues to grow, reinforcing its position as one of the fastest-expanding areas of global finance. Industry forecasts continue to highlight this momentum, with Moody’s expecting global private credit assets under management to exceed US$2 trillion in 2026 as demand for alternative lending solutions continues to expand. Yet despite this growth and increasing availability of capital, many businesses are discovering that securing funding has become more demanding rather than easier.

At first glance, this appears contradictory. In reality, it reflects a fundamental shift in today's capital markets. The challenge is no longer a shortage of capital. Instead, capital has become more selective, more disciplined and far more intentional in where it is deployed.

For founders, CFOs, management teams and investors, the question is no longer whether funding exists. It is whether their business is prepared to earn the confidence of increasingly sophisticated lenders.

The Capital Paradox

Recent market activity across the UK, Europe and APAC illustrates this shift clearly. According to Deloitte's Spring 2026 Private Debt Deal Tracker, the European private debt market recorded a record 987 deals in 2025, representing a 15.4% increase year on year, supported by stabilising interest rates and a recovery in M&A activity.

Yet despite this momentum, lenders are applying greater discipline in selecting opportunities. The continued growth of private credit as an asset class does not mean capital is being deployed indiscriminately. Instead, lenders are becoming increasingly focused on portfolio quality, downside protection and long-term risk-adjusted returns.

Rather than pursuing transaction volumes for their own sake, fund managers are prioritising underwriting quality, resilient cash flows, experienced management teams and businesses capable of delivering sustainable long-term performance. Greater emphasis is now being placed on cash flow visibility, operational resilience, reporting quality, management capability and an organisation's ability to navigate changing market conditions.

For businesses seeking finance, this distinction matters. Slower lending activity should not be interpreted as less capital being available. Instead, it reflects a more sophisticated approach to risk.

Today's underwriting question is no longer simply whether a business can service debt today. Increasingly, lenders want confidence that it can continue performing through changing market conditions, economic uncertainty and evolving competitive pressures.

The India-UK Free Trade Agreement Is About More Than Trade

Alongside developments in private credit, the implementation of the India-UK Free Trade Agreement represents one of the most important economic milestones between the two countries in recent years. The agreement, which came into force on 15 July 2026, is expected to reduce tariffs across a broad range of goods and services, improve market access and create new opportunities for bilateral trade and investment.

For businesses on both sides of the corridor, the implications extend far beyond exports. Stronger commercial relationships are expected to accelerate strategic partnerships, mergers and acquisitions, supply chain expansion and international growth. For businesses, this means more than increased export opportunities.

Cross-border growth inevitably creates additional demand for working capital, acquisition finance, trade finance and flexible funding structures capable of supporting international expansion.

However, entering new markets also places greater pressure on cash flow, inventory, receivables, operational infrastructure and investment planning.

Businesses that align their capital strategy with their expansion plans before opportunities emerge will be far better positioned to move quickly, negotiate from a position of strength and execute confidently.

Trade agreements create opportunity, but they also compress decision-making timelines. Organisations that prepare early are often the first to act. For many businesses, the agreement represents more than a trade milestone. It provides an opportunity to rethink international growth strategies, capital allocation and long-term financing requirements. Businesses that align their funding strategy with expansion plans early will be better positioned to move quickly and execute with confidence.

If you're considering international expansion, our latest article explores what the India-UK Free Trade Agreement means for businesses and the funding opportunities it could create.

From Growth Stories to Financeable Businesses

Only a few years ago, funding conversations were largely driven by ambitious growth projections.

Growth remains important, but resilience has become equally valuable. Proskauer's 2026 Private Credit Survey, covering firms managing more than US$1.47 trillion, highlights this shift, with optimism around deal activity increasingly balanced by caution around asset quality, pricing discipline and broader macroeconomic uncertainty.

Lenders are placing greater emphasis on predictable earnings, cash flow visibility, customer diversification, operational reporting and financial governance.

This reflects today's broader economic environment, where businesses continue to navigate higher borrowing costs, geopolitical uncertainty, evolving trade relationships and persistent inflationary pressures.

Preparation has therefore become a genuine competitive advantage.

Businesses that invest in stronger financial reporting, realistic forecasting and disciplined capital planning are increasingly distinguishing themselves from competitors pursuing similar funding opportunities.

This also explains why many profitable businesses continue to struggle to secure finance.

Strong financial performance alone is no longer enough.

Increasingly, lenders are assessing financeability: the quality of cash flows, reporting, governance, capital structure and the business's ability to demonstrate resilience through changing market conditions. This growing gap between profitability and financeability has become one of the defining characteristics of today's lending environment. Businesses may have strong commercial performance, but lenders are increasingly looking for evidence of sustainable cash generation, robust governance and the ability to withstand changing conditions.

Our latest article explores why profitable businesses can still find funding difficult and what management teams can do to improve their financeability.

Liquidity Is Becoming a Competitive Advantage

Another notable shift is changing how businesses approach funding altogether.

Rather than waiting until capital is urgently required, many management teams are engaging lenders much earlier.

Businesses are refinancing well ahead of debt maturities, arranging acquisition facilities before identifying targets and establishing additional funding capacity before launching strategic investment programmes.

Planning ahead allows businesses to evaluate a wider range of funding structures, negotiate stronger commercial terms and align financing with long-term strategy rather than short-term necessity.

Liquidity is no longer viewed simply as protection against uncertainty.

Increasingly, it has become a strategic asset that provides flexibility when opportunities emerge.

Many businesses are also looking beyond traditional lending by unlocking capital already sitting on their balance sheets. Assets such as property, machinery, inventory and receivables can often support growth without relying solely on unsecured borrowing or equity dilution. As lenders continue developing more flexible structures, asset-backed financing is becoming an increasingly attractive option for businesses seeking growth capital while preserving ownership.

A Changing Macro Environment

The wider economic landscape continues to reinforce these trends.

Businesses are operating against a backdrop of geopolitical change, evolving trade policies and shifting monetary conditions. At the same time, investment remains strong across sectors including artificial intelligence, digital infrastructure, healthcare, defence, advanced manufacturing and the energy transition. Moody’s expects private credit markets to continue gaining momentum through 2026, with M&A activity, asset-backed finance and private credit opportunities across EMEA and APAC contributing to continued growth in the sector.

Business ambition has not diminished.

Companies continue to pursue acquisitions, international expansion and digital transformation.

What has changed is how these ambitions are financed.

Increasingly, businesses are prioritising certainty of execution, flexibility and funding structures capable of supporting growth across a range of economic scenarios, rather than focusing solely on the lowest cost of capital.

This is precisely where private credit continues to demonstrate its strategic value.

Why Advisory Matters More Than Ever

As financing structures become increasingly sophisticated, access to capital alone is no longer enough.

Choosing the right funding partner, structuring facilities effectively and presenting a compelling investment proposition have become equally important.

Businesses are no longer operating in a market defined by a shortage of lenders. They are operating in one where lenders have become considerably more discerning.

At the same time, regulators across Europe continue increasing their focus on transparency, valuation practices and systemic risk as private credit becomes a more significant part of the global financial system.

Against this backdrop, specialist advisory has become increasingly valuable. Businesses need support not only in accessing capital, but also in identifying the right funding partner, structuring appropriate solutions and preparing effectively for lender diligence. This is driving demand for specialist advisory firms that combine deep market expertise with agility, commercial focus and partner-led execution.

Helping businesses prepare for lender diligence, articulate their growth strategy and structure financing appropriately is no longer simply about improving the likelihood of securing funding. It is about ensuring businesses access the right capital, on the right terms and at the right stage of their growth journey.

Market Watch

Several themes continue to define today's funding landscape:

Institutional fundraising remains strong, reinforcing long-term confidence in private credit.
Lenders are prioritising underwriting quality and portfolio resilience over transaction volume.
The India-UK Free Trade Agreement is expected to create new opportunities for cross-border investment and financing.
Regulatory scrutiny across Europe continues to increase as private credit matures.
Businesses should expect greater due diligence, stronger underwriting standards and more sophisticated funding discussions.

The overall message is clear. Capital remains abundant. Access to it is becoming increasingly selective.

Continue the Conversation

The private credit landscape continues to evolve, and the strongest funding outcomes are often driven by preparation, informed decision-making and access to the right expertise.

If you are exploring growth capital, acquisition finance, refinancing or international expansion, understanding your funding readiness and the available financing options can help you approach the market with greater confidence.

Explore our latest resources:

→ Debt Readiness Checklist Understand the key financial, operational and reporting areas lenders evaluate during the funding process.

→ Private Debt vs Venture Debt vs Bank Debt Comparison Guide Explore how different funding solutions align with different business objectives.

→ Market Pulse Webinars & Events Stay updated on the latest private credit trends, lender sentiment and market developments across the UK, Europe and APAC.

Implications for Businesses

Today's funding environment rewards preparation.

Businesses that engage with funding discussions early, maintain robust financial reporting and develop a clear capital strategy continue to secure the strongest outcomes. Those that wait until funding becomes urgent often find themselves with fewer options and reduced negotiating leverage.

Lenders are increasingly evaluating far more than financial performance. Governance, reporting quality, strategic preparedness and resilience have become central to modern underwriting. Perhaps the most important lesson emerging from today's market is that successful funding rarely begins with an immediate need for capital.

It begins with thoughtful planning, proactive engagement and a clear understanding of how financing supports broader business objectives. In a market where optionality has become one of the greatest competitive advantages, preparation is no longer simply good practice.

It is a strategic advantage.

Looking Ahead

As we move further into the second half of 2026, private credit continues to mature as one of the most important sources of capital for ambitious businesses. The broader message from today's market is clear: capital remains available, but successful funding outcomes increasingly depend on preparation, strategic clarity and financial readiness.

Institutional confidence remains strong, financing structures continue to evolve and businesses have access to more funding solutions than ever before.

At the same time, lenders are becoming increasingly analytical, disciplined and selective.

The question facing businesses today is therefore not whether capital exists.

It is whether they are positioned to earn the confidence of the capital that does.

As new trade agreements, technological transformation and evolving capital markets continue creating fresh opportunities, organisations that prepare early, build strategic flexibility and approach capital proactively will be best placed to convert uncertainty into long-term growth.