Private credit – reckless risk-taking or a market-driven response to tighter regulation?
The private credit market has emerged as a consequence of a changing regulatory landscape. Concerns have been raised in numerous articles about capital moving outside the traditional banking market. In this post, we want to focus on the positive sides of private credit
By: Roger Håkanson, Associate Partner, TicWorks
Summary: Private credit has rapidly moved from niche to a central piece of the financing landscape – driven by banks scaling back their risk appetite. For Nordic SMEs, this means broader access to capital over time, increased competition in the lending market, and stronger conditions for growth. Here, we explore why the concerns highlighted in news coverage have limited relevance for the Nordic market
A piece of the financing landscape
Private credit has become an important piece of the modern financing landscape. A gap has been filled as banks have scaled back their risk appetite, and private credit has helped channel capital to companies looking to grow, invest, and create new jobs in the process. It also strengthens competition in the lending market and broadens access to financing – something that's healthy for both businesses and society
Systemic risk or a market-driven response?
Of course, private credit is an area worth keeping an eye on to avoid systemic risk – but at its core, this is a market-driven response to changing conditions. In our view, the concerns raised in recent news coverage have limited relevance for the Nordic market. We still see many companies that are underfinanced, which holds back growth
Conclusion
Put simply: with the right structure and responsibility, private credit contributes to a more dynamic and innovative economy. For mid-sized companies that aren't getting the right terms from the bank, a broader financing strategy can make all the difference – learn more about how we work on our debt advisory page or take a look at our past transactions for concrete examples
.avif)
