There has been a lot of buzz around private equity’s growing reach in healthcare, but providers have other options to fund growth. And one of those funding sources is gaining popularity.
“Private credit is filling a void right now,” explains Everett Wilson, managing partner of Polsinelli’s Miami office and a shareholder in the law firm’s Health Care Practice Group.
According to Goldman Sachs, private credit encompasses several strategies that cover the capital structure and borrower type, ranging from secured loans for blue-chip corporate borrowers and junior unsecured credit for financing new building construction to loans against specialized assets and distressed situations.
The private debt market has increased more than six-fold since the global financial crisis in 2007 and 2008. As of 2022, the private credit market stands at $1.2 trillion, according to data analyzed by the global investment firm, Revcycle Intelligence reports.
Private credit is not new to healthcare. However, other alternative sources of funding —alternative to a loan from a traditional bank, that is — have taken the spotlight as of late. Notably, private equity has taken a major interest in the healthcare industry, garnering a lot of backlash and skepticism because of its financial mission to generate a return on investment.
However, the tides are turning once again. Private equity is seemingly on its way out in the healthcare industry, at least for now, while private credit is pushing in. Read more.
