Key Players in Private Credit for SMB Financing

Private credit has become a major funding source for small and medium-sized businesses (SMBs), offering faster and more flexible options compared to traditional bank loans. With nearly 50% of new SMB credit facilities in the U.S. now provided by alternative lenders, this market is reshaping how businesses secure capital. Key players like Five Points Capital, Sixth Street, and Clearly Acquired bring distinct approaches, from relationship-driven partnerships to tech-enabled solutions.

Key Takeaways:

• Five Points Capital: Focuses on long-term partnerships with established lower middle-market companies, offering loans between $5–$30 million.
• Sixth Street: Specializes in asset-based lending, targeting businesses with strong asset bases and managing large-scale partnerships.
• Clearly Acquired: Combines AI tools with financing, deal sourcing, and advisory services, catering to smaller businesses and acquisition-focused entrepreneurs.

This growing market provides SMBs with tailored financing structures and faster access to capital, helping them navigate challenges like inflation and banking constraints.

Discover Why Top Entrepreneurs Prefer Private Credit for Business Financing: Insights & Benefits

Private Credit Market Overview and Trends in 2025

The private credit market has grown significantly in recent years, transforming how small and medium-sized businesses (SMBs) access financing. By 2025, private credit has shifted from being a simple alternative to bank loans into a complex network of specialized lenders offering fast and flexible funding solutions for SMBs.

Growth of Private Credit for SMBs

The surge in global private credit assets has fundamentally changed SMB financing. Traditional banks, constrained by regulations like Basel III, have tightened their lending practices, leaving a gap that private credit funds are eager to fill. These funds offer the speed and adaptability that many businesses now prioritize.

Direct lenders are increasingly using AI and machine learning to assess creditworthiness through non-traditional data sources, such as cash flow patterns and supplier relationships. This tech-driven approach significantly cuts down funding delays, allowing businesses to act quickly when opportunities or challenges arise. Below, we explore key trends shaping this evolving market.

Key Trends in Private Credit

Several trends are driving the transformation of private credit for SMBs:

• Asset-Based Lending (ABL): Lenders are leaning more on assets like inventory, receivables, or equipment as collateral, rather than relying solely on cash flow. This shift broadens access to financing for businesses that may not qualify for traditional unsecured loans.
• Unitranche Financing: This structure, which combines senior and subordinated debt into a single loan, is becoming more popular. It simplifies the borrowing process and typically offers pricing that lands between separate senior and mezzanine debt options.
• Sector-Specific Expertise: Funds are tailoring their offerings to industries such as healthcare, manufacturing, and technology. By focusing on specific sectors, lenders can better understand the unique risks and opportunities, leading to more customized and competitive financing terms.
• Collaborations with Regional Banks: Direct lenders are increasingly partnering with regional banks. These partnerships allow banks to maintain their customer relationships while accessing the capital needed to meet SMB financing demands.
• ESG Considerations: Environmental, Social, and Governance (ESG) factors are starting to influence lending decisions. Some funds now offer better terms to businesses that meet sustainability or governance standards, recognizing that strong ESG practices often align with lower long-term risks.
• Hybrid Financing Models: New structures like revenue-based financing and updated merchant cash advance models are expanding the range of options available to SMBs. These models, combined with improved data-driven underwriting practices, make financing accessible to businesses with limited credit history but strong operational performance. Alternative data sources, such as utility and rent payments, are playing a key role in this evolution.

As competition in the private credit market heats up with new entrants, SMBs are reaping the benefits of faster processing times and more favorable terms. These developments highlight private credit's growing importance as a flexible and dynamic alternative to traditional funding sources.

Key Players in Private Credit for SMB Financing

The private credit market for small and medium-sized businesses (SMBs) is shaped by several prominent players, each offering unique approaches to help businesses achieve their growth goals.

Five Points Capital

Five Points Capital focuses on the lower middle market, providing flexible debt and equity solutions that bridge the gap between traditional bank loans and large private equity investments. The firm typically invests $5–$30 million in businesses with at least $3 million in EBITDA, making it a strong option for established SMBs aiming to scale.

Rather than prioritizing quick deals, Five Points Capital emphasizes building long-term partnerships. Its financing options include unitranche debt, second lien debt, subordinated debt, and equity co-investments. These structures are tailored to support buyouts, recapitalizations, or strategic acquisitions [2, 3].

The firm seeks companies with solid value propositions, competitive advantages, high free cash flow, experienced leadership teams, and strong equity backing. Its portfolio includes businesses across sectors like performance marketing, healthcare, manufacturing, and consumer services. Next, let’s look at how Sixth Street uses asset-based lending to address a variety of financing needs.

Sixth Street

Sixth Street plays a significant role in asset-based lending, leveraging specialized investment funds and strategic partnerships. In 2024, the firm introduced its Private Asset-Based Investment Fund I, targeting companies with EBITDA between $10 million and $250 million or valuations ranging from $50 million to $1 billion.

This approach focuses on securing capital with tangible assets, making it well-suited for SMBs with strong asset bases but fluctuating cash flows. Sixth Street’s dedication to the SMB sector is evident in its high-profile partnerships. For example, in 2024, it partnered with Affirm Holdings, committing up to $4 billion over three years to purchase Affirm loans. Additionally, in January 2025, Sixth Street collaborated with Northwestern Mutual to manage $13 billion in assets, primarily for asset-based financing. Shifting gears, Clearly Acquired offers a more technology-driven, full-service financing model.

Clearly Acquired

Clearly Acquired sets itself apart by blending financing solutions with deal sourcing, advisory services, and advanced technology. The platform integrates AI tools to streamline capital access, deal sourcing, and advisory services for Main Street and lower mid-market businesses.

Its offerings cover a wide range of financing options, including SBA 7(a) loans, SBA 504 loans, commercial loans, equipment financing, lines of credit, merchant cash advances, equity injections, and partner buyouts. This variety enables businesses to structure creative deals that optimize terms and reduce overall costs.

What makes Clearly Acquired unique is its combination of financing with robust deal flow and advisory services. The platform provides access to public and private business listings, off-market search tools, and automated systems for finding opportunities. AI-driven valuation tools, secure data rooms for due diligence, and seamless connections with investors or co-investors further enhance the process.

Additionally, its loan brokerage services match SMBs with lenders tailored to their credit profiles and deal specifics, saving time and effort. Through Plaid integration, buyers can pre-qualify for financing, simplifying the process before making offers. For businesses focused on growth rather than acquisitions, Clearly Acquired also offers working capital solutions, debt refinancing, and strategic planning tools. These include creative financing structures like seller notes and earnouts, enabling SMBs to complete transactions that might not fit traditional bank lending criteria. This tech-forward approach reflects a broader trend toward more agile, data-driven financing solutions in the SMB market.

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Comparing Approaches and Offerings

In response to evolving market trends, lenders are now tailoring their strategies to address the unique challenges faced by small and medium-sized businesses (SMBs). Each lender brings a distinct approach, targeting varied business segments and offering different levels of support. For SMBs, understanding these differences is key to finding the right financing partner that aligns with their growth goals and operational needs.

Five Points Capital focuses on building long-term relationships rather than quick, transactional deals. The firm specifically targets established lower middle-market companies with proven business fundamentals, such as strong value propositions, competitive advantages, and experienced leadership teams. Their selective approach means they work with fewer clients but provide in-depth support throughout the partnership. For example, in 2025, they facilitated Splash Plumbing’s expansion in Southern California and helped CASE Consulting secure hybrid financing for an acquisition using unitranche debt.

On the other hand, Clearly Acquired takes a technology-driven, full-service approach. By integrating financing with deal sourcing and advisory services, they use AI-powered tools to streamline processes, offering SMBs quick access to comprehensive financial solutions. This model is particularly appealing to businesses seeking speed and efficiency in securing funds.

Comparison Table

Factor	Five Points Capital	Sixth Street	Clearly Acquired
Primary Strategy	Relationship-focused partnerships	Not disclosed	Technology-driven full-service
Loan Size Range	$5–$30 million	Not disclosed	Varies by product type
Target EBITDA	Minimum $3 million	Not disclosed	Main Street to lower mid-market
Lending Products	Unitranche debt, second lien debt, subordinated debt, equity co-investment	Not disclosed	SBA 7(a), SBA 504, commercial loans, equipment financing, lines of credit, merchant cash advances, equity injections
Typical Borrowers	PE-backed companies, independent sponsors, management teams	Not disclosed	Main Street businesses, acquisition-focused entrepreneurs
Transaction Types	Buyouts, recapitalizations, acquisitions	Not disclosed	Acquisitions, growth capital, refinancing, partner buyouts
Key Differentiator	Deep industry expertise and patient capital	Not disclosed	Integrated deal sourcing and AI-powered tools
Geographic Focus	U.S. lower middle market	Not disclosed	U.S. Main Street focus

For SMBs, the choice between these approaches depends on factors like deal size, business stage, and the type of support needed. For instance, companies seeking $5–$30 million in funding with strong operational fundamentals might prefer Five Points Capital's relationship-driven model. In contrast, businesses prioritizing speed and integrated deal support could find Clearly Acquired's tech-enabled platform more appealing.

Timing also plays a role. Traditional lenders like Five Points Capital often take longer to complete due diligence but offer patient capital and deeper industry expertise. Meanwhile, platforms like Clearly Acquired excel in providing faster approvals and streamlined processes for standard financial products. This diversity in strategies underscores the broader shift in the private credit market, where flexibility and efficiency are becoming increasingly important for SMB financing.

How SMBs Can Access Private Credit

Getting private credit financing isn’t just about applying; it’s about being prepared and understanding what lenders need. These days, lenders have adopted more efficient processes, so let’s dive into the key steps and documents required to make your application stand out.

Small and medium-sized businesses (SMBs) should gather essential paperwork like income statements, tax returns, and, if applicable, personal financial records. These documents play a crucial role in supporting your application. Modern lenders often rely on digital underwriting methods, prioritizing real-time financial data over traditional credit scores.

In fact, many lenders now use real-time cash flow analysis and AI tools to evaluate creditworthiness, moving beyond the old-school reliance on credit scores.

Simplified Financing with Clearly Acquired

If you’re looking for a smoother way to navigate private credit, Clearly Acquired offers an all-in-one solution. This platform simplifies the process by combining AI-driven pre-qualification with comprehensive deal support in a single marketplace.

With Plaid integration, Clearly Acquired instantly verifies financial details, helping businesses quickly explore their financing options. The platform’s tools are designed to match you with the right type of financing, speeding up the approval process.

Clearly Acquired offers a range of financing solutions, including SBA loans, equipment financing, lines of credit, and merchant cash advances. If your business is focused on acquisitions, the platform also supports creative financing options like seller notes, earnouts, and mezzanine capital.

What’s more, their automated documentation management system makes things even easier. The platform’s deal management hub centralizes communication and document sharing, offering secure data rooms for sensitive information. From sourcing the deal to closing it, Clearly Acquired provides end-to-end support to guide SMBs every step of the way.

Conclusion

The world of private credit is rapidly evolving, driven by fresh funding approaches and technology-powered solutions. For small and medium-sized businesses (SMBs), private credit has become a game-changer, offering access to much-needed capital without the hurdles of traditional bank financing. What sets it apart is the ability to provide tailored terms and repayment options that conventional banks simply can’t match.

One of the standout benefits? The speed. Private credit transactions are designed to move quickly, delivering essential funding when businesses need it most.

Another major advantage is that private credit allows business owners to secure funding without giving up equity. This means entrepreneurs can maintain full control over their companies - a critical factor for those who want to keep decision-making firmly in their hands.

The diversity of private credit strategies highlights just how much this space has grown. From established funds like Five Points Capital and Sixth Street to newer, tech-driven platforms, SMBs now have a wide range of financing options. Each lender offers unique strengths, whether it’s expertise in a specific industry, a focus on particular deal sizes, or innovative financing structures.

A great example of this evolution is Clearly Acquired, which combines AI-driven pre-qualification with comprehensive deal support. By integrating tools like Plaid for real-time financial verification and automating lender matching, the platform removes many of the traditional barriers to securing funding.

Beyond just providing capital, many private credit lenders take a relationship-focused approach. They offer ongoing mentorship and business expertise, which can be invaluable for SMB owners tackling the challenges of growth.

As the private credit market continues to expand, SMBs have more opportunities than ever to find the right financing partner. The key lies in understanding your options, getting your documentation in order, and leveraging platforms that connect you with lenders who truly understand your industry and financial needs.

FAQs

What makes private credit a faster and more flexible option than traditional bank loans for SMB financing?

Private credit is gaining attention for its quick turnaround and adaptability, making it a solid option for small and medium-sized businesses (SMBs) in need of financing. While traditional bank loans can take anywhere from 30 to 90 days to process, private credit often delivers funding in just 5 to 14 days - an ideal solution for businesses facing time-sensitive financial needs.

What sets private credit apart is its ability to offer tailored loan structures. With fewer regulatory hurdles compared to traditional banking, it allows borrowers to negotiate terms that align closely with their unique objectives. This flexibility makes it an appealing choice for entrepreneurs looking for fast and strategic funding options.

How do AI and machine learning improve credit assessments in the private credit market?

AI and machine learning are reshaping credit assessments in the private credit market by processing massive amounts of data with unmatched speed and accuracy. These technologies combine traditional financial metrics with alternative data sources, offering a more precise evaluation of creditworthiness and a sharper ability to predict potential default risks.

By automating the analysis process and simplifying due diligence, AI and machine learning empower lenders to make quicker, more informed lending decisions. This reduces the chances of manual errors while uncovering risks and opportunities that might have gone unnoticed, fundamentally changing the way credit is evaluated and managed.

What advantages does unitranche financing offer SMBs compared to traditional debt options?

Unitranche financing offers small and medium-sized businesses (SMBs) a streamlined alternative to traditional senior and mezzanine debt. By merging different layers of debt into a single loan with a blended interest rate, it simplifies the borrowing process and cuts down on administrative hassles.

This approach comes with several perks: quicker access to funds, more adaptable terms, and repayment schedules that are easier to manage. These advantages help SMBs seize opportunities faster, navigate growth with ease, and maintain their edge in competitive markets.