PRIVATE CREDIT STRENGTHENS SMALL BUSINESSES

The AIC is the premier trade association for private credit in Washington – representing over 2/3 of the industry. Private credit provides financing directly to businesses. It has become a valuable alternative to traditional lending from banks, especially for small- to medium-sized businesses that often do not qualify for loans from traditional banks or need capital beyond what banks are willing to provide. EY recently prepared a report for the AIC that details how private credit supports small businesses, jobs, and investors across America. Please scroll down and learn how private credit is helping businesses and the economy.

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Hear From Small Business Leaders

Entrepreneurs and business owners speak about how private credit has strengthened their businesses.

Private Credit is A Partner to Small Businesses

AIC President & CEO Drew Maloney highlights two key benefits of private credit: providing small businesses a lifeline through flexible financing options beyond traditional banking, alongside partnerships and professional advice.

Private Credit Delivers Value

Marc Lipschultz, Co-CEO of Blue Owl Capital discusses private credit on CNBC’s Squawk Street: “We deliver three things — predictable financing solutions, private financing for long term needs, and a partnership.”

Private Credit Allows For Better Benefits

Founder & CEO of Otter Learning Chase Begor shared how private credit has strengthened his business and allowed them to provide their schools’ employees better health, dental and vision insurance, 401Ks, and other benefits.

Private Credit Helps Businesses Grow and Scale

AIC President & CEO Drew Maloney discussed how private credit helps businesses grow stronger, scale, and hire employees.

Private Credit Helped Us Become Better and Improve Our Operations

Founder & CEO of Otter Learning Chase Begor “We talk to business owners constantly who are looking to sell or not looking to sell. But they always say, we’re starving for someone to have a conversation with about how to become better and how to improve our operations.

What is the Impact of Private Credit
on the U.S. Economy?

$500B

in private credit has been invested in more than 3,600 businesses across America

1.6M

jobs are supported by private credit in 2022, earning $137 billion in wages and benefits

150

employees, is the size of the median company receiving private credit

How Does Private Credit Work?

Businesses depend on two main sources of outside funding: credit and equity. Private credit, like private equity, helps strengthen and scale businesses of all sizes. But instead of owning part of a company, as private equity funds do, private credit loans provide an alternative to traditional bank lending and can be tailored to the specific needs of the borrower. Companies of all sizes and sectors receive private credit loans, including healthcare, infrastructure, technology & IT, and more.

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Who Benefits From Private Credit?

Private credit benefits companies, workers, and investors:

Small & Medium Businesses

benefit from individually tailored loan structures that banks are unable to extend and from loan providers that are committed to the success of the company.

Workers

benefit from stronger companies that have capital to invest in them.

Investors

gain from higher returns and less volatility than public markets.

What Are the Benefits of Private Credit for Businesses?

Provides an alternative source of funding

for small businesses who do not qualify for loans from traditional banks or need capital beyond what banks are willing to provide.

Offers loan structures that are individually tailored

to fit the businesses’ needs, which is especially important during periods of economic downturns or when other lenders pull back.

Delivers quick access to funding

Businesses are able to quickly access funding from private credit investors who care about the success of the companies.

Deploys capital countercyclically

and through hard times. When economic downturns occur and traditional banks pull back their lending, private credit can continue extending credit to businesses.

Provides a safe and stable funding source

The private credit industry, is not susceptible to “run risks” that can lead to financial crises.

Provides access to experienced managers and investors

These executives take a hands-on approach and offer ongoing business mentorship and expertise.

How is the Private Credit Industry Regulated?

Private credit funds are well regulated by the U.S. Securities and Exchange Commission and are structured to prevent risk. A recent report from the U.S. Government Accountability Office found that private credit lending practices are appropriate and that the debt structure, documentation, and underwriting are robust and adequately protective of lenders. A recent report by the Federal Reserve concluded that private credit funds do not pose significant financial stability vulnerabilities.

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