Private credit is often considered when a transaction has become time-sensitive, conventional lending is unable to meet the requirement, or a funding deadline is approaching.
However, one of the most important considerations in specialist finance is not simply how quickly capital can be arranged, but when the funding conversation begins.
At Henry Dannell, we believe private credit should be considered as part of the wider financing strategy, rather than only when other options have become constrained.
The Cost of Leaving Funding Decisions Too Late
When a funding requirement becomes urgent, the range of available options can narrow.
Lenders still need to assess the borrower, security, purpose of the facility and proposed repayment strategy. A compressed timeline can make it more difficult to complete the necessary due diligence, negotiate terms or explore alternative structures.
This can become particularly relevant for property acquisitions, refinancing deadlines, business transactions or situations where liquidity is required ahead of an anticipated capital event.
The challenge is not necessarily whether funding is available. It is whether the most appropriate structure can be identified and implemented within the time available.
Early Conversations Create Greater Flexibility
Considering private credit earlier does not mean committing to borrowing before it is needed.
It means understanding where specialist funding could fit within the wider strategy.
An early assessment can help establish:
- Whether conventional or specialist lending is more appropriate.
- What security and leverage may be available.
- How the facility could be structured around the intended use of capital.
- What a credible repayment or exit strategy would look like.
- Whether the additional flexibility of private credit justifies its cost.
These considerations are easier to assess when there is sufficient time to evaluate the available options.
Private Credit Should Support the Strategy, Not Dictate It
Private credit can provide flexibility where conventional lending structures are unsuitable, particularly when requirements involve complex assets, non-standard income, bespoke security arrangements or defined funding periods.
However, flexibility comes at a cost.
The objective should not be to access private credit simply because it is available or potentially quicker to arrange.
It should be to establish whether the structure offers a commercially appropriate solution when considered against the client’s wider financial position, objectives and repayment capacity.
A facility that solves an immediate funding requirement but creates an uncertain exit may introduce more risk than it resolves.
The Henry Dannell Approach
At Henry Dannell, our starting point is to understand what the client needs the capital to achieve.
From there, we consider the funding requirement, available security, timescales, lender appetite and intended repayment strategy.
By engaging before funding becomes urgent, clients and their advisers have greater opportunity to assess the trade-offs between different lending structures and prepare a credible proposition for the market.
Private credit should be a considered financing option, not simply a response to a deadline.
For clients anticipating an acquisition, refinancing requirement or future liquidity event, an early conversation can help establish what funding options may be available before timing becomes the determining factor.
Contact Henry Dannell to discuss your private credit requirements and explore how specialist funding could support your wider financial strategy.
Private credit and specialist finance are subject to lender criteria and individual circumstances. Where borrowing is secured against property or other assets, those assets may be at risk if the terms of the facility are not met. Independent legal and tax advice should be taken where appropriate.
