Private Credit for UK Private Investors
Private credit — also called private debt — means lending to companies outside the banking system for a yield premium. Learn how direct lending works, what income to expect, and how UK investors can access it.
- 20
- active UK platforms
- £1k+
- typical entry point
- 1–5 yrs
- investment horizon
- Medium–high
- risk · medium liquidity
Private Credit in ten seconds
Drawn from the 20 UK platforms we track in this category and our editorial research.
- Typical investment
- £1k–£50k+
- Investment horizon
- 1–5 years
- Liquidity
- Medium
- Risk
- Medium–high
- Return potential
- Low–medium
- Income
- High
- UK retail access
- High via P2P, trusts, LTAFs
- Common structures
- Direct lending funds, P2P, listed debt trusts, BDCs
What is private credit?
Private credit is lending by non-bank investors to companies, typically mid-sized businesses that banks no longer serve. Loans are usually floating-rate, senior and secured.
One of the fastest-growing alternative classes globally, it offers contractual income rather than capital growth — with credit and liquidity risk in return.
The private credit lifecycle
- 01
Originate
The manager sources loans directly with borrowers, setting terms and covenants.
- 02
Underwrite
Credit analysis, security and structure are agreed.
- 03
Deploy
Investor capital funds the loans over one to two years.
- 04
Collect
Interest and fees are paid — usually quarterly — and distributed.
- 05
Repay
Loans mature or refinance; principal returns to investors.
Three ways to get private credit exposure
Direct lending funds & LTAFs
Diversified loan books run by a credit manager.
P2P & marketplace lending
Choose loans or auto-invest on FCA-regulated platforms.
Debt investment trusts
Listed vehicles holding private loans; ISA and SIPP eligible.
What returns look like
Income arrives early and steadily; the risk is in defaults late in the cycle rather than a J-curve.
- Yield
- Contractual interest, typically 7–12% gross for direct lending.
- Default rate
- Share of loans that fail to pay — the key risk metric.
- Recovery
- How much is recovered on defaulted loans, driven by security.
What can go wrong
Capital is at risk. Most private credit products are high-risk investments under FCA rules and may require an appropriateness assessment.
Credit risk
Borrowers default; recoveries depend on security and seniority.
Illiquidity
Fund redemptions may be gated; P2P secondary markets can freeze.
Platform risk
Several UK P2P platforms have failed or closed to retail.
Rate sensitivity
Floating rates protect income but raise borrower default risk.
Concentration
Small loan books can hinge on a few borrowers.
Fees
Layers of platform, manager and servicing fees erode yield.
How UK investors can access private credit
From least to most accessible. Each route trades off minimums, liquidity and control.
Direct lending funds
£1m+ commitments to institutional credit funds.
Feeder funds
Aggregated access via wealth managers, £50k+.
LTAFs & BDC-style
FCA-regulated open-ended credit funds.
P2P lending
FCA-regulated platforms from £1k, often with an IFISA.
Debt trusts
Daily-traded credit trusts in an ISA or SIPP.
Private Credit platforms in the UK
20 active · 51 closed or inactive
Go deeper on private credit
Private Credit questions
- Is private credit the same as private debt?
- Yes — the terms are interchangeable. Our directory uses Private Debt; this hub uses Private Credit, the more common investor term.
- What yield can I expect?
- Direct lending funds typically target 7–12% gross; P2P varies widely by security and borrower.
- How liquid is it?
- Listed trusts trade daily; LTAFs offer periodic windows; P2P depends on a secondary market that can close in stress.
- Is it FCA regulated?
- Platforms and fund managers are FCA-authorised; the loans themselves are not protected by the FSCS.
- Can I use an ISA?
- Yes — Innovative Finance ISAs hold P2P loans; listed debt trusts fit a Stocks & Shares ISA.
- How does it compare to bonds?
- Higher yield and floating rates, but less liquidity, no public rating and higher default risk.
Other asset classes
Looking for the full list? Browse every private credit platform in the directory.
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