The market for EquitiesFirst financing and private credit could grow amid economic uncertainty
Private credit has grown steadily over the past decade and now represents a major source of capital for businesses during uncertain economic times. High interest rates and tighter regulatory constraints on traditional banks have created space for alternative financing options.
Private debt assets reached a record $1.19 trillion at the end of 2024, according to Ocorian’s Global Asset Monitor, growth of 3.9% year-over-year and a 435% increase since 2009.
“Companies are increasingly seeking financing partners who can provide flexibility and liquidity in uncertain times, particularly as traditional lending channels have become more constrained,” says Al Christy Jr., CEO of alternative financing provider EquitiesFirst.
Banking retreat creates opportunity
While banks have pulled back from certain lending markets due to capital adequacy rules and regulatory pressures, private credit funds face no such constraints. This regulatory divergence has accelerated the growth of private credit, with firms like EquitiesFirst expanding their role in providing capital to businesses and individuals with relatively illiquid equity assets that might otherwise struggle to secure funding.
The trend has accelerated following recent market turbulence. When President Trump unveiled his tariff plan in April 2025, banks from Barclays to JPMorgan were attempting to pitch more than $12 billion in debt financings for corporate buyouts. As markets reacted negatively, traditional lenders struggled to offload this debt, creating an opening for private credit providers.
The impact was swift. US leveraged-loan funds experienced a record $6.5 billion weekly outflow as investors dumped corporate debt amid fears about tariff-related economic damage. This withdrawal of capital from public markets has further reinforced private credit’s growing importance.
“We have seen somewhat of a structural shift in access to capital,” says Christy Jr., whose firm is formally known as Equities First Holdings and has provided equities-based financing since 2002. “The combination of bank retrenchment and increasing market volatility has accentuated the role of alternative funding sources.”
EquitiesFirst and flexible solutions during market disruption
Private credit’s ability to adapt to changing economic conditions has been particularly evident in recent months. Before Trump’s global tariffs were set to take effect, private credit managers actively worked to assess potential impacts on their portfolios, according to market participants. Direct lenders contacted portfolio companies to evaluate risks and discuss action plans, particularly for businesses with global supply chains or significant exposure to consumer spending
The potential solutions offered by these lenders can be wide-ranging, including earnings adjustments, deferred cash interest payments, and operational changes for borrowers. This flexibility stands in contrast to the more rigid terms typically offered by traditional banks and public markets.
KBRA recently highlighted this adaptability in a series of reports examining how tariffs and market volatility impact private credit markets. The reports noted that private credit’s stability is “underpinned by structural flexibility, a long-term investment horizon, and the capacity to extend liquidity through bilateral relationships and direct lending.”
These advantages, combined with an estimated $433 billion in available “dry powder,” position private credit providers to continue to offer financing amid market dislocations and potentially support businesses through turbulent periods.
“Private credit has emerged as a source of stability during downturns such as the 2008 crisis or the COVID-19 pandemic,” says Christy Jr. “This has catalyzed growth in the private credit market more broadly, as businesses have increasingly turned to alternative financing as the runway they need to adapt rather than force immediate restructuring.”
The rise of private credit has coincided with growing institutional investor interest in the asset class. Campbell Lutyens, an advisory firm focused on fundraising, conducted a poll of investors across 23 countries and found increased interest in private credit, with many investors viewing it as a valuable portfolio diversifier amid market uncertainty.
For specialist financing providers like EquitiesFirst, this means balancing meeting growing demand with maintaining prudent understanding of a variety of risk profiles.
The expanding private credit ecosystem now encompasses a broader range of institutional investors and asset types. Beyond supporting private equity deals or lending to mid-market corporates, private credit funds have diversified into asset-backed finance, infrastructure and project finance, large-scale residential financing, and commercial real estate financing.
The global economic outlook and private credit
The World Trade Organization projects global trade flows could decline by as much as 1.5% in 2025 due to trade tensions. This contraction, combined with already elevated interest rates, will likely test the underwriting standards of private credit providers and highlight differences between those with sustainable business models and those taking excessive risks.
But as markets adjust to new economic realities, private credit appears poised to cement its role as an alternative source of capital. McKinsey’s research indicates that private credit has grown nearly tenfold since 2009, making it one of the fastest-growing segments of the financial system.
This growth reflects not just cyclical factors but structural changes in how businesses access financing. Whether navigating trade wars, interest rate fluctuations, or other forms of economic turbulence, companies increasingly view private credit as a vital alternative to traditional financing channels, a trend that shows no signs of reversing in the foreseeable future.