Private lending has evolved from a niche option to a major player in real estate and business financing. After the 2008 financial crisis, banks tightened their lending standards, leaving a gap that private lenders quickly filled.1 With faster, more flexible financing solutions, private lenders have become a go-to resource for real estate investors and small business owners. As interest rates fluctuate and fintech innovations reshape the industry, private lending is set to keep growing, offering more opportunities for individual borrowers and investors alike.
The Rise of Private Lending
Over the past decade, private lending has expanded at an unprecedented rate. In 2010, private credit assets under management (AUM) totaled $300 billion. By 2022, that figure had quadrupled to $1.3 trillion, and the market continues to grow. The global private credit market reached $2.1 trillion in 2023, with the U.S. accounting for the majority of that total.
Why the Surge in Private Lending?
Private lending has grown rapidly in response to investor demand for stronger returns and tighter restrictions on traditional banks. As fixed-income yields lagged, many investors shifted toward private credit for higher risk-adjusted gains. At the same time, post-crisis regulations like Basel III pushed banks to scale back lending, especially to small businesses and real estate investors.3 This opened the door for private lenders, online platforms, and real estate debt funds to meet the financing needs of individuals and smaller-scale investors.
Key Trends Shaping the Future of Private Lending
1. Continued Growth & Institutional Acceptance
Private credit is no longer just an alternative; it’s become a mainstream financing solution. By 2023, private credit AUM rivaled the U.S. high-yield bond market, and it’s projected to exceed $2.5 trillion by the late 2020s. As borrowers look beyond banks for funding, private lenders are expanding their reach to offer more choices to real estate investors and entrepreneurs.
2. Banks Pulling Back, Private Lenders Stepping In
Regulatory pressures continue to limit traditional bank lending, creating opportunities for private lenders to step up, especially for those needing fast, flexible financing. Borrowers increasingly favor certainty and speed, which private lenders can provide more effectively than banks.
3. Expansion Into Niche Markets
Private lending is growing beyond traditional loans. New areas of focus include real estate bridge loans, small business financing, renewable energy projects, and other specialized opportunities. This diversification allows both borrowers and investors to benefit from underserved markets with attractive returns.
Private lending isn’t just expanding… it’s evolving. What began as a niche option has become a core part of the financial landscape, reshaping how individual investors access capital and how REIs and property owners fund their projects.
Looking Ahead
Private lending is no longer just an alternative to banks; it’s a key financing solution in today’s market. As banks continue to pull back, private lenders are stepping in to provide flexible, fast funding for real estate projects and small business needs. For borrowers, this means more opportunities to access capital, diversify investments, and act on time-sensitive deals.
Looking for the right private funding partner? Whether you’re scaling your portfolio or launching your next project, Conventus is here to help you move forward with confidence. With over a decade of experience, a proven team, and a track record of reliability, Conventus has earned its reputation as a trusted private lender for real estate investors across the country. Reach out today to explore flexible financing solutions tailored to your goals!
Sources:
- Stein, Jeremy C., et al. “The Decline of Big-Bank Lending to Small Business: Dynamic Impacts on Local Credit and Labor Markets.” Harvard University.
- Roche, Graham. “Private Credit Funds – Into the Mainstream.” Irish Funds, June 2024. https://www.irishfunds.ie/news-knowledge/newsletter/private-credit-funds-into-the-mainstream/. Accessed April 4, 2025.
- Avalos, Fernando, Sebastian Doerr, and Gabor Pinter. “The Global Drivers of Private Credit.” BIS Quarterly Review, March 2025, https://www.bis.org/publ/qtrpdf/r_qt2503b.htm. Accessed April 4, 2025.
- Brookfield Oaktree. “Private Credit Opportunities: The Universe Keeps Expanding.” Brookfield Oaktree, 21 March 2025, https://www.brookfieldoaktree.com/insight/private-credit-opportunities-universe-keeps-expanding. Accessed April 4, 2025.
