Private Credit Overtakes Traditional Bank Lending as Market-Based Debt Reaches 56% in the UK

For the first time in modern history, market-based finance has become the primary funding source for UK companies, accounting for 56% of corporate debt compared to 44% for traditional banks.
Inflation-adjusted bank lending has shrunk by 10% since 2005 as private credit reshapes corporate financing. While traditional bank loans are held on regulated, deposit-backed balance sheets, the expanding share of private credit and market-based debt resides within funds, insurers, and pension accounts—raising systemic concerns regarding transparency and deposit backstops as the U.S. mirrors a similar trajectory.