Private Credit direct lending portfolios are showing real stress. But private credit’s need for stable, asset-backed deployment is creating a strategic opening that banks and independents shouldn’t ignore.
At a Glance
- Secured Research’s 2025 capital markets analysis found that private credit funds deployed $23 billion into equipment-linked assets last year, up 34% from 2023—and that trajectory is accelerating as direct lending portfolios face rising stress and fund managers seek asset-backed alternatives with more predictable loss characteristics.
- Portfolio stress at prominent platforms—including visible pressure in ABL-adjacent strategies at firms the size of Blue Owl and Ares—is reshaping how private credit allocates capital, pushing deployment toward granular, collateralized asset classes where equipment finance sits squarely.
- For equipment finance executives, the question has shifted from “how do we defend against private credit?” to “how do we use private credit’s need for stable assets to scale our own platform?”
- The firms moving fastest are pursuing a partner-build-buy framework: partnering on capital, building origination infrastructure, or acquiring platforms that give private credit the deployment channel it needs while giving the equipment finance firm growth capital it couldn’t otherwise access.
The Cracks Are Real—And They Change the Calculus
The private credit narrative of the past three years was straightforward: record fundraising, aggressive deployment, and an expanding footprint across every corner of middle market lending. Equipment finance executives watched this expansion with a mix of concern and curiosity, unsure whether private credit was a competitor, a partner, or an existential threat.
