Glossary
Private credit
Private credit refers to lending by non-bank entities, often funds that pool investor money, rather than by banks. In property it includes many construction, bridging and short-term loans. ASIC has published work on the sector.
An example
A developer's construction loan is provided by a fund that raises money from investors. The fund's own funding and redemption arrangements can influence how it behaves as a lender.
Why it matters
Understanding where a lender's money comes from helps a borrower ask the right questions about how the lender may act if markets change. Privet explains private credit for borrowers only and does not promote investment funds.
Points to check
From the borrower's side, ask any private credit lender where its money comes from, whether investors can withdraw on short notice and how that might affect extensions or staged drawdowns. Check whether your loan could be transferred to another party. Privet explains private credit only from the borrower's point of view and does not promote or refer anyone to investment funds.
Related terms
Further reading: ASIC