Private capital expands further into SME and working capital finance markets

Private capital is continuing to expand its role in SME and working capital finance, as non-bank lenders and alternative investors step in to fill gaps left by traditional bank retrenchment.

Across multiple markets, private credit funds are increasing their exposure to areas such as receivables finance, asset-based lending and supply chain finance, reflecting growing demand for flexible funding solutions.

The trend is being driven by tighter bank lending conditions, regulatory pressure and the need for more adaptable financing structures, particularly for SMEs operating in volatile environments.

Market participants note that private capital is increasingly targeting short-duration, asset-backed opportunities, which offer attractive risk-adjusted returns alongside strong demand from businesses.

The shift highlights a structural evolution in the financing landscape, where private credit is becoming a more permanent and central component of working capital funding.