Private Credit in Switzerland: Selectivity and Documentation Become Decisive in 2026

Private credit linked to Swiss borrowers and Swiss-based origination channels amounted to several tens of billions of francs outstanding by 2024, combining domestic private debt funds, cross-border direct lending and platform-mediated SME financing, according to estimates derived from Preqin, the Swiss National Bank and the Crowdfunding Monitor Switzerland. At the same time, global private credit assets under management are expected to exceed CHF 2’000 bn by 2025. Against this backdrop, Switzerland is entering a phase in which the relevance of private credit is no longer measured by growth rates alone, but by how consistently underwriting standards, documentation quality and transparency hold up under tighter financial conditions.

A credit market still dominated by banks, but no longer shaped only by them

The Swiss corporate credit system remains structurally bank-led. This is repeatedly underlined in the Swiss National Bank’s Financial Stability Report, which continues to describe domestic banks as well capitalised and resilient. Yet the same reports show that lending to non-financial corporations has expanded more slowly than nominal GDP since 2022, despite stable economic activity. Higher interest rates and stricter risk assessment have not eliminated credit supply, but they have sharpened differentiation between standardised bank lending and situations requiring bespoke structures.

This distinction is particularly relevant in an economy dominated by smaller companies. According to the Federal Statistical Office, SMEs represent 99,7 % of Swiss enterprises and account for around 67 % of total employment. Many are profitable and conservatively financed, but they do not always fit the templates required for traditional bank credit, especially in cases involving succession, acquisitions, carve-outs or growth investment with uneven cash flows. Private credit has increasingly filled this space, not as a replacement for banks, but as a complementary channel where speed, structuring flexibility and certainty of execution carry economic value.

Regulatory incentives created durable space for non-bank lending

The expansion of private credit did not begin with the recent tightening cycle. It is rooted in regulatory changes following the global financial crisis. Higher capital and liquidity requirements under Basel III altered the economics of certain types of corporate lending on bank balance sheets. Even in Switzerland, where risk culture has traditionally been conservative, these incentives reduced appetite for leveraged or highly customised loans.

Private credit funds and direct lenders responded by offering bilateral financing solutions that could be tailored to individual borrowers. This model trades higher spreads for tighter lender control, more extensive documentation and, in many cases, collateral packages that would be impractical in syndicated bank structures. For Swiss mid-market companies, particularly those operating internationally, the trade-off has often been acceptable. For investors, it has created access to cash-yielding assets whose risk profile depends less on market liquidity and more on contractual discipline.

Global growth has turned private credit into a mainstream allocation

The Swiss market cannot be analysed in isolation from global trends. According to PitchBook, global private credit assets under management exceeded USD 1’700 bn in 2023 and are projected to surpass USD 2’000 bn by 2025, with longer-term projections approaching USD 4’500 bn by 2030. This expansion has been driven by institutional demand for yield, floating-rate exposure and diversification away from public bond markets.
Swiss institutional behaviour aligns with this pattern. Occupational pension assets amounted to roughly CHF 1’210 bn in 2024, according to the Federal Statistical Office, and alternative investments represented about 16,1 % of portfolios, up from 12,8 % in 2018. Private debt has gained a stable position within this allocation, reflecting its income characteristics and lower mark-to-market volatility relative to equities. What has changed is not the strategic role of private credit, but the scrutiny applied to how it is executed.

Market tensions highlight dispersion rather than systemic weakness

Recent defaults and restructurings have drawn attention to weaknesses in parts of the leveraged finance market. Cases such as Tricolor Holdings and First Brands Group have featured prominently in market commentary. As noted in analyses by asset managers and credit rating agencies, including Moody’s, the majority of losses in these situations were concentrated in the syndicated loan market and in CLO structures, rather than in conservatively originated bilateral private loans.

This distinction matters for Switzerland. It underlines that “private credit” is not a homogeneous asset class. Performance differences are increasingly driven by leverage levels, covenant protection, collateral enforceability and the lender’s ability to intervene early. Moody’s data show that default rates in European private credit remain below those observed in broadly syndicated loans, but dispersion has widened. For investors, this has shifted attention away from average yields towards deal-level structure and governance.

Senior secured lending remains the Swiss core

Within Switzerland, senior secured direct lending continues to dominate private credit activity. These loans typically rank first in the capital structure, are backed by borrower assets and include covenants designed to surface deterioration early. Floating-rate pricing has increased nominal coupons in the higher-rate environment without extending duration risk.

Preqin estimates that Swiss-focused private debt strategies raised around CHF 4,8 bn in 2024, with senior secured lending accounting for the majority of new capital. Borrower quality has been a key factor. Swiss mid-market companies generally exhibit moderate leverage, stable cash generation and comparatively strong governance, whether family-owned or backed by experienced private equity sponsors. Asset-backed lending and infrastructure-related debt have also attracted interest, benefiting from predictable revenue streams and contractual protection.

Private credit moves closer to growth financing

Private credit is no longer limited to mature, cash-generative companies. The repricing of growth equity since 2022 has increased its relevance for a subset of growth-stage firms. Swiss start-up investment declined sharply from the 2021–2022 peak. Depending on the source, total investment in 2024 ranged between roughly CHF 2,3 bn and CHF 3,3 bn, according to Startupticker.ch, Swissnex and the Swiss Venture Capital Report, with the decline concentrated in late-stage rounds.

At the same time, Switzerland’s innovation pipeline remains strong. The Federal Statistical Office reports annual research and development expenditure of around CHF 25 bn, equivalent to 3,4 % of GDP, one of the highest ratios globally. European Investment Fund data indicate a median time to exit of 9,3 years for Swiss venture-backed companies. In this context, venture debt, revenue-based financing and other hybrid credit instruments have gained relevance. They allow companies with recurring revenues and credible visibility to extend runways without accepting heavily discounted equity rounds. For lenders, these structures increase risk relative to traditional senior loans, reinforcing the importance of documentation and monitoring.

Platforms translate private credit into smaller, regulated tickets

A defining Swiss feature is the role of regulated digital platforms in broadening access to private credit. Under FinSA and FinIA, such platforms operate within a clear regulatory framework that emphasises transparency and investor protection. The Crowdfunding Monitor Switzerland published by the Lucerne University of Applied Sciences reports total Swiss crowdfunding volume of CHF 558,7 m in 2023. Of this, CHF 398,1 m related to crowdlending, primarily SME and consumer loans. Although volumes declined year on year, around 36 Swiss-domiciled platforms were active as of early 2024.

These figures remain small relative to institutional private credit markets, but they are large enough to demonstrate that access is no longer confined to large funds. For private investors, platform-mediated credit offers diversification and direct exposure, but it also raises expectations regarding reporting, covenant disclosure and portfolio oversight. In a more selective market, platforms are judged less on volume growth and more on the robustness of their origination and monitoring processes.

Investor behaviour converges across segments

Institutional investors remain the largest providers of private credit capital, but access models are converging. PitchBook reports that semi-liquid and evergreen private credit vehicles raised USD 86,4 bn globally in the first half of 2025, up from USD 57,4 bn in the same period of 2024. These structures aim to broaden access while retaining underwriting discipline.

Swiss private investors and family offices are increasingly part of this trend. The appeal lies in regular cash distributions and lower correlation with listed markets, combined with a degree of transparency that traditional closed-end funds do not always provide. The trade-off is liquidity management risk, which places additional importance on valuation practices and redemption controls.

Liquidity and secondary markets gain relevance

Although private credit is not exit-driven in the same way as equity, liquidity management has become more visible. Evercore estimates European secondary market volumes at around EUR 130 bn in 2024. Swiss assets are increasingly included, even if precise figures are not disclosed. Secondary transactions allow investors to rebalance portfolios and manage duration, reducing reliance on hold-to-maturity assumptions.

Platform-enabled secondary mechanisms further contribute to flexibility by allowing partial exits and portfolio adjustments. These developments are incremental rather than transformative, but they reflect a maturing market in which liquidity is managed rather than assumed.

Regulation and public policy support confidence

Switzerland’s regulatory stability remains a comparative advantage. Unlike some EU jurisdictions, Switzerland has avoided abrupt interventions affecting private lending structures. Sustainability and transparency requirements have been introduced gradually, largely codifying existing practice among professional lenders. Public support for innovation, through instruments such as Innosuisse, indirectly strengthens borrower credit profiles and supports later-stage financing.

Selectivity becomes the defining criterion

As private credit matures, selectivity has moved from rhetoric to necessity. In practical terms, it means conservative leverage assumptions, covenants that provide early warning rather than cosmetic comfort, collateral that can be enforced across jurisdictions and reporting that allows investors to assess performance continuously. Defaults are processes rather than events, and outcomes depend on preparation and governance.

For Switzerland, the implication is clear. The private credit market approaching 2026 will not be defined by a return to abundant liquidity, but by the quality of its trust infrastructure. Platforms, funds and lenders that combine disciplined underwriting with transparent access are positioned to remain relevant. Those that treat private credit as a yield product rather than a governance-intensive business are likely to struggle as the cycle becomes less forgiving.