Binomial distribution and Private credit: Difference between pages

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''Statistics.''
''Debt - non-bank lending - private markets.''


A discrete probability distribution built up from a series of binomial trials.
Private credit is a loan to a business that is originated by a lender other than a bank or other traditional financial institution, and is not tradable in a public market.


Private credit is also sometimes known as ''direct lending'', ''alternative lending'', ''non-bank lending'' or ''private debt''.


The binomial distribution can be an appropriate model for processes where:


#The process consists of a limited whole number of identical trials or situations (n).
Borrowers are typically small and medium sized enterprises, or smaller listed companies.
#Each trial results in just one of only two possible outcomes (eg success or failure).
#The probability of success (p) remains constant for each trial.
#The trials are independent, and
#Primary interest lies in the probability of a specified number of successes (or of failures) in the n trials.


Lenders are typically regulated asset managers.


For example, the total number of sales achieved in a fixed number of sales appointments, assuming the probability of achieving a sale remains constant for each appointment.
 
Purposes of private credit borrowings are wide ranging, including - among other purposes - asset backed finance and trade finance.




== See also ==
== See also ==
* [[Binary]]
* [[Alternative Credit Council]] (ACC)
* [[Binomial]]
* [[Asset backed finance]]
* [[Discrete random variable]]
* [[Asset manager]]
* [[Frequency distribution]]
* [[Credit institution]]
* [[Poisson distribution]]
* [[Credit risk]]
* [[Creditworthiness]]
* [[Debt]]
* [[Facility]]
* [[Finance ]]
* [[Listed company]]
* [[Loan]]
* [[Packing credit]]
* [[Private bond]]
* [[Private equity]]
* [[Regulation]]
* [[Small and Medium-sized Enterprises]]  (SMEs}
* [[Trade credit]]
* [[Trade finance]]
 
 
==Other resource==
*[https://acc.aima.org/about-acc/about-private-credit.html Alternative Credit Council (ACC) - Private credit explained]
*[https://acc.aima.org/research/borrower-s-guide-to-private-credit.html Borrower's guide to private credit - UK edition - Alternative Credit Council]]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:Risk_frameworks]]

Revision as of 04:03, 6 February 2024

Debt - non-bank lending - private markets.

Private credit is a loan to a business that is originated by a lender other than a bank or other traditional financial institution, and is not tradable in a public market.

Private credit is also sometimes known as direct lending, alternative lending, non-bank lending or private debt.


Borrowers are typically small and medium sized enterprises, or smaller listed companies.

Lenders are typically regulated asset managers.


Purposes of private credit borrowings are wide ranging, including - among other purposes - asset backed finance and trade finance.


See also


Other resource

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