Rising Demand for Personal Loans: A Trend with a Future?

The majority of fund limited partners plan to expand their asset allocation to private credit this year, according to a survey by S&P Global Market Intelligence. Michael Gross, co-founder of SLR Capital Partners, commented on this development in an interview with Catalysts and outlined the prospects for private credit, especially against the backdrop of declining interest rates. According to Gross, investor interest in private credit will persist, as it is more advantageously structured compared to liquid credit. Banks are increasingly under pressure to withdraw from this business sector, allowing private credit to fill this gap. The standard in private credit transactions is always high because lenders do not want to take risks, Gross reiterated. In the current phase of the economic cycle, however, the bar has been set even higher. Creative alternatives such as loans against hard assets are gaining importance because they do not depend on a positive economic environment. With the onset of the Federal Reserve’s rate-cutting phase, cash flow lending could become more difficult. In contrast, sectors like factoring, equipment leasing, and life sciences lending are expected to yield high returns. "We see a genuine opportunity in continuing to lend to these companies and can thereby close the gaps created by the withdrawal of regional banks," Gross concludes optimistically.