Private credit has become one of the most important areas of growth in today’s investment landscape. As banks continue to scale back lending and investors look for stable, income-producing alternatives, private credit has stepped into a central role. Yet many people still wonder what private credit actually is and why it has become such a powerful force in both real estate and broader capital markets. (BIS Quarterly Review)

Private credit (also known as private lending, private debt, or non-bank lending) refers to loans originated by non-bank institutions such as private credit funds, debt funds, or asset managers.
These loans do not come from traditional banks and are not issued on public markets like bonds.

Private credit typically includes financing for:

- Real estate acquisitions and development
- Business expansions or recapitalizations
- Middle-market corporate lending 
- Bridge loans 
- Mezzanine debt 
- Asset-backed loans

At its core, private credit fills the gap between what borrowers need and what banks are willing or able to provide.

According to Bank Capital and the Growth of Private Credit (Chernenko, Ialenti, and Scharfstein), one of the biggest reasons private credit has expanded so rapidly is that banks now face significantly higher capital requirements than in the past. This structural shift, which began after the 2008 financial crisis, has made lending to riskier sectors such as transitional real estate and middle-market companies more costly for traditional banks. As a result, non-bank lenders have stepped in to fill the gap.

These regulations have limited the ability of banks to lend on transitional real estate, construction projects, and middle-market companies. As a result, private lenders now fill the space that banks once occupied. At the same time, investors have been searching for higher yields and more predictable risk-adjusted returns, and private credit has proven to offer these characteristics with less correlation to public equity and bond markets. (Brookings; S&P; BIS)

In real estate, private credit plays a very practical role. Sponsors often need capital quickly, evaluated by professionals who understand business plans that involve renovation, repositioning, or development. 
Private lenders can review a deal more efficiently, structure terms around the actual needs of the project, and provide certainty of execution. 

- Senior Debt

- Mezzanine Debt

- Bridge Loans

- Preferred Equity

- Asset-Backed Lending (ABL)

- Structured Credit

In today’s environment, private credit matters more than ever. Interest rates remain elevated, banks are conservative, and many real estate projects require thoughtful, hands-on financing expertise. Private lenders provide liquidity and structure at a time when traditional sources are limited. For investors, private credit offers exposure to real assets and cash-flowing loans supported by real estate fundamentals and sponsor performance. (FEDS, 2024)

At RD Advisors, we focus on senior-secured real estate private credit supported by disciplined underwriting and a fundamentals-driven approach, with a dedicated emphasis on the Greater Boston market.
Our goal is to provide borrowers with flexible, reliable capital solutions and to offer investors access to professionally managed private credit strategies backed by real estate fundamentals.

If you would like to learn more about how private credit works or how RD Advisors approaches the asset class, we would be happy to connect.

You can send out an email to our team at contact@rdadvisorsre.com 

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