Direct lending: Difference between revisions
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Revision as of 08:37, 13 March 2022
Direct lending is when a non-bank lender (usually an insurance company or an investment firm) lends directly to ultimate borrowing companies rather than doing so via a bank or a hedge fund.
Funds dedicated to direct lending have increased as this type of lending has often been looked down upon by banks.
For example, Lawrence Delevingne writing for Reuters[1] (24 July 2017) says "direct lenders make high-interest rate loans, usually to fledgling or struggling businesses passed over by banks".
However, as banks struggled to lend to smaller companies following new capital requirements following the global financial crisis starting in 2007/8 and the eurozone crisis starting in 2009, direct lending has grown and some banks themselves started conducting some of their corporate lending via direct-lending funds.
See also
