At a glance
- The figures reassign lending the Fed had previously booked to financial companies abroad.
- Business development companies owed banks $181 billion of that at year-end 2025, private debt funds $150 billion and interval and tender-offer funds $18 billion, per the Fed's Table 1.
- For a fund selector, the structure creates a specific test: how much of a manager's income is paid in kind, and what its bank facilities demand in cash.
US-domiciled private credit vehicles owed banks $349 billion at the end of 2025, according to the Federal Reserve's Oct. 16 account of the market. The figures reassign lending the Fed had previously booked to financial companies abroad.
Business development companies owed banks $181 billion of that at year-end 2025, private debt funds $150 billion and interval and tender-offer funds $18 billion, per the Fed's Table 1.
For a fund selector, the structure creates a specific test: how much of a manager's income is paid in kind, and what its bank facilities demand in cash. Some loan contracts let a borrower add unpaid interest to principal, so a fund can book the income before any cash arrives while the bank that financed it still expects payment on its own schedule, according to CryptoSlate's analysis of the Fed data. Banks hold collateral and priority in a distribution, which can stop a sour loan from becoming a bank loss; exercising those protections can also force a fund to produce cash before its borrowers are ready to pay.
Private credit vehicles with a US footprint hold more than $2.6 trillion in assets including foreign-based vehicles, of which roughly $1.5 trillion is private loans to US businesses. The Fed had previously attributed the $349 billion of bank loans to financial companies abroad, and the reclassification is not evidence that individual banks concealed their exposure, according to CryptoSlate.
Technology and business services took 33% of private credit issuance in the Fed's sample, against 27% in leveraged loans. Healthcare added another 13%, as Private Wealth Daily previously reported.
Depending on the contract, a lender can take investment assets or investors' capital commitments as collateral, and funds add capacity by drawing revolving lines they repay as financing needs change.
The Fed figures measure the funding side of the structure. The credit risk sits in the loan book. PIK income is where underwriting strain tends to surface first, and the $18 billion owed by interval and tender-offer funds is the piece with a direct line to shareholders: those vehicles offer limited opportunities to sell shares back, and a bank's claim on the fund's cash takes priority over them.
BDCs carried just over half of the $349 billion owed
Bank loans owed by US-domiciled private credit vehicles, by fund type, end-2025 ($B)
| Part | Value | Share |
|---|---|---|
| 181 | 51.9% | |
| 150 | 43% | |
| 18 | 5.2% |
Reported by the Direct Lending desk from CryptoSlate, citing Federal Reserve Table 1, Oct. 16, 2026 and Private Wealth Daily archive (Insurance AUM Journal, Fed sample). Published . Corrections