Beyond Bonds: How Asset-Based Finance Is Reshaping Private Credit Strategies

In a concerning trend, banks are pulling back on lending across multiple sectors, with the most critical area of impact being consumer lending. This pullback is particularly significant given that consumer spending drives nearly 68% of the United States' gross domestic product in the first quarter, underscoring the potential economic ripple effects of reduced financial accessibility.
The contraction in lending signals a potential slowdown in economic momentum, as consumers—the primary engine of economic growth—find themselves facing tighter credit conditions. This trend not only affects individual purchasing power but also hints at broader economic uncertainties that are making financial institutions more cautious in their lending strategies.