Private credit

Private credit is corporate financing provided directly by specialist investment funds rather than by banks or the public bond markets. It covers direct lending, mezzanine debt, unitranche and bespoke facilities, and has become a major source of financing for LBO and growth transactions.

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Its rise, one of the defining features of the 2026 financing market, reflects the relative retreat of banks from certain segments and institutional investors' search for yield. For an SME, private credit offers flexibility, speed of execution and higher leverage, in exchange for a higher cost and tailored covenants.

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Example: a growing Swiss SME raises CHF 15.0 million of unitranche private credit at SARON + 6.0% to finance an acquisition, where a bank club would have offered only CHF 9.0 million of senior debt. The higher leverage accelerates value creation for shareholders, at the cost of a heavier debt service.

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At Hectelion, we integrate private credit solutions into our financial structuring work to broaden the financing capacity of the buyouts we advise.