Introduction
Private credit is a fast-growing area of alternative investments. Instead of lending through banks, investors provide loans directly to businesses or individuals.
How Private Credit Works
- Direct lending: funds flow from investors to borrowers without banks.
- Types: private mortgages, asset-backed loans, mezzanine financing.
- Returns: typically 8–12% depending on security and term.
Why Investors Choose It
- Diversification: returns not correlated to stock markets.
- Income: predictable monthly or quarterly interest.
- Security: loans often backed by real estate or other assets.
Risks to Consider
- Liquidity: funds usually locked in for 12–36 months.
- Credit risk: borrower may default.
- Regulatory: available mainly to accredited investors.
Conclusion
Private credit investing is a compelling option for those seeking diversification and income. Zion Wealth structures secured, short-term loans for qualified investors.