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Chart of the Week
Oct 24, 2025
2 MIN READ

Private credit fundamentals remain solid

Headlines hint at excess but the data show private credit’s rise reflects a shift in market share as private lenders gain ground on banks and public credit markets.
authors
Christopher Bole
Christopher Bole
Vice President, Financial Writer
VIEW BIO
Leveraged credit market by size, lender type % of U.S. GDP
Column chart showing leveraged credit market by size based on their percentage of GDP from 2010–2024. Total debt has held steady between roughly 20–25% of U.S. GDP over the past 15 years. Private credit strategies have grown from approximately 1% to 4% of
Source: Federal Reserve, U.S. Bureau of Economic Analysis, Preqin, Future Standard, as of year-end 2024.
  • Recent corporate bankruptcies and regional bank lending issues have fueled concerns of a private credit bubble. However, the data tells a different story.
  • Total private-sector debt has held steady at 20%–25% of U.S. gross domestic product (GDP) over the past 15 years, standing at approximately 23% at year-end 2024.
  • Some view the surge of inflows to investment vehicles marketed to individuals, namely closed-end funds and business development companies (BDCs), as evidence of excess. Those assets have only grown from approximately 1% to 4% of GDP since 2010.1
  • Meanwhile, private credit fundamentals remain solid. Nonaccruals (1.2%) and default rates (1.45%) sit below their 10-year averages of 1.9% and 2.76%, respectively.2
  • Taken together, the data suggests private credit’s growth represents a shift in market share with private lenders capturing a larger portion of the pie from banks and public credit markets, not a bubble.
contributing authors
No items found.
footnotes + disclosures
  1. Federal Reserve, U.S. Bureau of Economic Analysis, Preqin, Future Standard, as of year-end 2024.
  2. Cliffwater Direct Lending Index. Data as of June 30, 2025.

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