Private Debt: An Expert Financing Solution for Capital Projects

For project owners seeking substantial funding—starting from $250 million and beyond—private debt offers a powerful and flexible financing solution.

Unlike traditional bank loans or public markets, private debt is provided by specialized private lenders, offering tailored terms, faster execution, and access to capital for complex or unique projects.

In this guide, we’ll explore how private debt works, its benefits, and why it’s an ideal option for large-scale project financing.

What is Private Debt?

Private debt refers to loans provided by non-bank lenders, such as private credit funds, institutional investors, or specialized financing firms.³

These lenders offer debt financing directly to businesses or project owners, often for projects that require significant capital or have unique characteristics.^1,2

• Infrastructure projects (e.g., energy, transportation, utilities)
• Real estate developments
• Industrial or manufacturing facilities
• Large-scale acquisitions or expansions

How Does Private Debt Financing Work?

Private debt financing involves borrowing funds from private lenders, who assess the project’s viability, cash flow potential, and risk profile.

Unlike traditional lenders, private lenders are often more flexible in structuring loans, offering:

• Customized Terms: Tailored repayment schedules, interest rates, and covenants.
• Speed and Efficiency: Faster approval and funding compared to traditional banks.
• Higher Loan Amounts: Access to larger capital pools, often exceeding $250 million.

Private lenders assess the project’s viability, cash flow potential, and risk profile, often offering customized terms and faster execution.⁴ The process typically involves:

1. Project Evaluation: Lenders assess the project’s feasibility, cash flow projections, and collateral.
2. Term Sheet Negotiation: Terms are agreed upon, including loan amount, interest rate, and repayment schedule.
3. Funding: Once approved, funds are disbursed to support the project’s development or operations.

Key Benefits of Private Debt for Project Owners

Private debt has gained popularity as a flexible and efficient financing option, particularly for large-scale projects as it offers:⁵ 

1. Flexibility: Private lenders can structure loans to meet the unique needs of your project, such as deferred repayments during the construction phase.
2. Access to Large Capital: Private debt is ideal for projects requiring $250 million or more, where traditional financing may fall short.
3. Speed: Private lenders often have streamlined processes, enabling faster access to funds.
4. No Equity Dilution: Unlike equity financing, private debt allows you to retain full ownership of your project.
5. Tailored Solutions: Private lenders are experienced in handling complex projects, offering creative financing solutions.

Private Debt vs. Traditional Financing

	Private Debt	Traditional Bank Loans
Speed	Faster approval and funding	Lengthy approval processes
Flexibility	Customized terms and structures	Standardized terms
Loan Size	Often exceeds $250 million	Limited by bank lending caps
Risk Appetite	Higher tolerance for complex projects	More conservative
Collateral Requirements	Flexible, based on project cash flows	Strict, asset-based

Private debt is increasingly favored for its ability to handle larger loan amounts and complex structures, making it a preferred choice for institutional investors.⁶

When is Private Debt the Right Choice?

Private debt is an excellent option for project owners who:

• Require $250 million or more in financing.
• Need flexible terms to align with project timelines.
• Are developing complex or unique projects that may not fit traditional lending criteria.
• Seek to avoid diluting equity or losing control of their project.

How to Access Private Debt Finance

1. Identify the Right Lender: Look for private credit funds or lenders with experience in your industry or project type.
2. Prepare a Strong Proposal: Highlight your project’s viability, cash flow potential, and risk mitigation strategies.
3. Negotiate Terms: Work with lenders to structure a loan that aligns with your project’s needs.
4. Close the Deal: Finalize the agreement and secure funding to move your project forward.

Why Choose Private Debt for Your Project?

Private debt is more than just financing—it’s a strategic tool for unlocking the potential of large-scale projects.

With its flexibility, speed, and access to substantial capital, private debt empowers project owners to bring their visions to life without compromising control or equity.