Private credit is financing structured against a company's assets, cash flow, or a combination of both, rather than underwritten purely on a borrower's credit rating like a conventional bank loan. In Asia Pacific, it has become a primary source of growth and bridge capital for middle-market companies, particularly in Thailand, Malaysia, Singapore, and Indonesia, as regional banks tighten lending criteria.
- What Is Private Credit?
- Why Private Credit Is Growing in Asia Pacific
- How Private Credit Financing Is Structured
- Private Credit Financing by Market
- Who Private Credit Financing Is For
- Key Terms Glossary
- FAQ
What Is Private Credit?
Private credit is non-bank lending provided by asset managers, family offices, and specialist financing firms rather than commercial banks. Unlike a standard bank loan, which is underwritten mainly on the borrower's credit profile and financial ratios, private credit is structured against a defined collateral pool.
That collateral pool can include:
- Hard assets — real estate, equipment, inventory, or other tangible collateral
- Cash flow waterfalls — structured claims on a company's net operating income
- Additional credit enhancements — guarantees, subordination structures, or covenants tailored to the deal
This asset- and structure-based approach is what allows private credit to finance transactions that don't fit inside a bank's standard credit box, including bridge financing, growth capital, and special situations.
Why Private Credit Is Growing in Asia Pacific
Banks across Asia Pacific have been tightening general lending, particularly for mid-sized companies with financing needs that fall outside standardized credit products. As that gap has widened, private credit has stepped in as an alternative source of capital for companies that have strong underlying businesses but don't fit conventional bank criteria, whether due to deal complexity, timeline, or structure.
This shift mirrors a broader global trend: as regulatory capital requirements make certain categories of lending less attractive for banks, private credit managers have absorbed a growing share of corporate financing, a pattern playing out across both developed and emerging markets, including Asia Pacific.
How Private Credit Financing Is Structured
Every private credit transaction is structured around the specific asset base and cash flow profile of the borrower. Common structures include:
- Bridge financing — short-term capital secured against real assets, used to fund a transaction ahead of permanent financing or a liquidity event
- Growth capital — financing tied to a company's expansion plans, often secured against a blend of assets and projected cash flow
- Special situations financing — capital for complex, time-sensitive, or non-standard scenarios that don't fit conventional lending categories
Deal sizes in this space typically range from US$10 million to US$100 million, reflecting the middle-market companies most affected by the retreat of conventional bank lending.
Private Credit Financing by Market
GMG Capital Advisory, the private credit and special situations arm of Global Mortgage Group (GMG), is currently most active in Thailand, Malaysia, Singapore, and Indonesia. Each market has distinct dynamics driving demand.
Private Credit Financing in Thailand
Thailand is currently one of GMG Capital Advisory's busiest markets for private credit. Demand is concentrated among mid-sized companies pursuing growth, acquisitions, or bridge capital ahead of a transaction, where conventional Thai bank lending criteria don't fit the timeline or structure required.
Private Credit Financing in Malaysia
In Malaysia, private credit has become an increasingly common solution for business owners and middle-market companies whose financing needs, often tied to expansion or restructuring, fall outside standard bank products.
Private Credit Financing in Singapore
As a regional financial hub, Singapore sees demand for private credit both from local companies and from cross-border transactions structured through Singapore-based holding entities, where speed and structuring flexibility matter as much as pricing.
Private Credit Financing in Indonesia
Indonesia's private credit activity is driven largely by growth-stage companies and special situations financing, where deal complexity or timeline puts transactions outside what conventional Indonesian bank lending can accommodate.
Who Private Credit Financing Is For
Private credit financing through GMG Capital Advisory is typically used by:
- Middle-market companies with a financing need that doesn't fit standard bank criteria
- Business owners pursuing a transaction, expansion, or restructuring on a timeline banks can't accommodate
- Private banks and client advisors whose clients need a financing solution outside the bank's own product shelf
GMG Capital Advisory works alongside, not in competition with, private banks, arranging financing from third-party capital providers that solves the client's need while the bank retains the underlying relationship.
Key Terms Glossary
Private credit
Non-bank lending structured against a company's assets or cash flow rather than credit rating alone.
Special situations financing
Capital for complex, time-sensitive, or non-standard transactions outside conventional lending categories.
Bridge financing
Short-term capital secured against assets, used to fund a transaction ahead of permanent financing.
Middle-market company
A business generally too large for small-business lending but below the scale that accesses large-cap institutional debt markets.
Collateral pool
The combined set of assets, cash flows, and credit enhancements securing a private credit facility.
FAQ
Q1: What is private credit financing?
Private credit financing is capital provided by non-bank lenders, structured against a company's assets, cash flow, or both, rather than underwritten purely on credit rating the way a conventional bank loan is.
Q2: How is private credit different from a bank loan?
A bank loan is underwritten primarily on a borrower's credit profile and standardized ratios. Private credit is structured around a specific collateral pool: hard assets, cash flow waterfalls, and other credit enhancements, making it more flexible for deals that don't fit a bank's criteria.
Q3: What deal sizes does GMG Capital Advisory arrange?
GMG Capital Advisory typically arranges private credit and special situations financing between US$10 million and US$100 million for middle-market companies across Asia Pacific, connecting borrowers with institutional and private capital providers.
Q4: Which markets is GMG Capital Advisory most active in?
GMG Capital Advisory's busiest markets are currently Thailand, Malaysia, Singapore, and Indonesia.
Q5: Why is private credit growing in Asia Pacific?
As banks across the region tighten general lending, private credit has become an increasingly important source of growth and bridge capital for companies whose financing needs fall outside conventional bank products.
Q6: Is private credit financing more expensive than a bank loan?
Private credit is generally priced to reflect its flexibility and speed relative to conventional bank lending. Exact terms depend on the collateral structure, deal complexity, and timeline of each transaction.
Q7: How long does it take to close a private credit transaction?
Timelines vary by deal complexity and collateral structure, but a key advantage of private credit over conventional bank lending is the ability to move faster on transactions with defined timelines.
Q8: Who is eligible for private credit financing?
Eligibility is based primarily on the strength of the underlying collateral pool and cash flow rather than a standardized credit score, which is why companies with strong assets but a non-standard financing need often qualify even when a bank has declined them.
