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New study finds private credit complements bank lending
Private credit does not replace bank lending and expands credit availability to U.S. businesses
Key findings:
Private credit does not replace bank lending.
When firms borrow from private credit they are more likely to also borrow from banks.
Private credit’s growth reflects market expansion, not risk migration.
Private credit isn’t replacing bank loans. It instead complements traditional lending by expanding credit availability to U.S. businesses. That’s the big takeaway from a new study by the Committee on Capital Markets Regulation (CCMR).
The paper, Examining the Relationship Between Bank Lending and Private Credit (September 2025), evaluates the “replacement hypothesis”—the idea that private credit’s dramatic growth reflects credit migrating from banks to nonbanks. The study provides clear evidence that private credit strengthens the U.S. financial system by expanding access to capital and fueling economic growth alongside bank lending.
Key findings
Private credit does not replace banks lending
Bank lending has remained steady or increased along with the rise of private credit over the last decade. Borrowers continue to rely on banks for core financing needs, demonstrating that private credit expands credit availability for businesses by acting as a complementary source of capital.
November 19, 2025Blog
When firms borrow from private credit they are more likely to also borrow from banks
Companies with private credit loans are 4.8% more likely to also borrow from banks. The positive relationship holds across company sizes and over time, including among middle-market borrowers.
Private credit’s growth reflects market expansion, not risk migration
Private credit is an additional source of capital for borrowers, not an effort by lenders to avoid banking rules. The study finds no evidence that the growth of private credit shifts risk outside the banking system or poses a systemic risk. Instead, private credit operates alongside banks, expanding credit availability and supporting market resilience.
Private credit also helps diversify funding sources without adding risk to the financial system. Funds come from long-term investors—such as pension funds and insurers—rather than bank deposits, which are susceptible to run risk.
