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5 min read

Investing in private credit: what you need to know

By Jelle van Es

Published on 03 jul 2026

Discover our Private Income Fund

There are many ways to invest. At Marktlink Capital, you can invest in private equity, venture capital, and co-investment funds, among others. These funds typically have a long term, which means your capital is tied up for an extended period.

Are you looking for more flexibility within private markets? Then private credit could be an interesting option. With the Marktlink Capital Private Income Fund, you invest indirectly in loans to unlisted companies and benefit from interest income paid out on a quarterly basis. You receive these payments regularly, whereas with private equity, you often don’t receive your first distribution until after a few years. In this article, you’ll learn how private credit works, what risks are involved, and for which investors our Private Income Fund might be a good fit.

What is private credit?

Private credit is a form of financing in which non-bank investors, such as investment funds, provide loans to companies and, for example, real estate projects. A company can use such a loan to make an investment or finance an acquisition. The advantage of private credit lies in the fact that obtaining financing from a bank takes longer. Banks must meet increasingly stringent requirements when granting loans. Private credit funds can take a specialized approach and offer a tailored solution more quickly.

With the Marktlink Capital Private Income Fund, you invest in a fund-of-funds that invests in unlisted corporate loans and real estate projects. Through underlying funds, capital is provided to hundreds of medium-sized companies.

These companies pay interest and repay their loans according to pre-agreed terms. The interest income and principal repayments form the basis for the returns distributed to investors.

Key takeaways from this blog

The difference between a bank loan and a private credit loan
The risks of private credit
How investing in private credit works
The difference between private credit and private equity
The different types of private credit financing
Which investors are suited for private credit

private credit

What is the difference between a bank loan and a private credit loan?

Private credit loans are provided to businesses. Why don’t these companies just opt for a bank loan?

Banks are subject to strict regulation and have extensive evaluation procedures. Businesses often have to meet a large number of conditions before a loan is approved. Private lenders also conduct a thorough analysis, but they generally have more flexibility in their decision-making and terms.

This offers several advantages over traditional bank financing.

Faster decision-making

With private credit, a credit decision can often be made more quickly. For companies that need capital quickly to capitalize on opportunities, this can be a significant advantage.

More customized terms

While banks typically rely on standardized processes, private credit providers are better able to tailor financing terms to a company’s specific situation. This often results in a solution that is attractive to both the borrower and the lender.

Actively contributing to the financial strategy

Private lenders regularly contribute ideas regarding a company’s financial strategy. This involvement can contribute to a sound financing structure and the company’s sustainable growth.

A hypothetical example

But how does an investment in private credit work in practice? Let’s look at a hypothetical example.

Suppose a software company with €50 million in revenue has the opportunity to acquire a competitor. This acquisition would allow the company to increase its market share and accelerate revenue growth. However, to finance the acquisition, the company needs additional capital.

A traditional bank might deem this financing too risky and require additional collateral, such as a personal guarantee from the owner. A private lender, on the other hand, can offer more customized solutions and tailor the financing to the company’s specific situation and future cash flows.

On the other hand, the risk for the lender may be higher. To compensate for that risk, the interest rate is typically higher than with a traditional bank loan. This remains attractive to the company because it gains faster access to capital and can capitalize on growth opportunities.

private credit

What are the risks of private credit?

As with any investment, investing in private credit also involves risks. It is therefore important to fully understand these risks before investing.

Credit risk

The most significant risk in private credit is credit risk. If a company can no longer meet its interest or principal payment obligations, this can result in losses for investors.

Although fund managers conduct extensive analyses before granting a loan, companies can still run into financial difficulties.

Risk profile

As with other private-market investments, the underlying risk profile of private credit is high. Past performance is no guarantee of future results, and significant losses are possible. It is possible to lose the entire investment.

Market risk

Economic headwinds can affect the companies in which investments are made. Examples include rising interest rates, slowing economic growth, refinancing difficulties, or an increase in bankruptcies. Such developments can impact the performance of a private credit portfolio.

How to invest in Private Credit

If you want to invest in private credit, you’ll typically follow these steps.

You commit your capital to a fund

The first step is to commit an investment amount. With the Marktlink Capital Private Income Fund, you can invest starting at €100,000. When you invest, you deposit the capital immediately, and your money is put to work right away.

The fund provides loans

Using the capital raised, the underlying fund extends loans to companies or other types of borrowers. These companies pay interest over the term of the loan and repay the principal to the underlying fund in accordance with pre-determined terms.

You receive distributions

The interest income and principal repayments received by the underlying fund are reinvested in the fund and periodically distributed to investors. This creates a relatively predictable stream of income.

What types of loans are common in private credit?

Various types of business loans are provided within private credit. Each form of financing has its own risk-return profile.

Direct lending

Direct lending is the most common form of private credit. These loans are also referred to as senior debt.

In this arrangement, the fund provides a loan directly to a company. These loans are often secured by collateral, such as machinery, inventory, real estate, or intellectual property.

Because these loans are high up in the capital structure, they generally carry a lower risk than other forms of lending.

Preferred equity

In funds focused on preferred equity transactions, investors receive a pre-agreed preferential return and have priority over common shareholders in the event of distributions or a sale.On the other hand, they assume greater risk than traditional lenders, as creditors are repaid first. As a result, preferred equity generally offers a higher expected return than senior debt loans.

Mezzanine financing

Mezzanine financing falls between debt and equity. It is also known as junior debt. This form of financing ranks lower in the capital structure than senior debt, resulting in higher risk. This is typically offset by a higher interest rate.

In some cases, lenders also receive what is known as an “equity kicker,” which allows them to benefit from the company’s appreciation in value.

Unitranche financing

A unitranche combines features of senior debt and mezzanine financing into a single loan.

This structure simplifies the financing process and enables faster decision-making. As a result, unitranche financing is increasingly being used for corporate acquisitions and growth financing.

private income

For which investors might private credit be suitable?

Private credit is not suitable for every investor. Whether this asset class aligns with your goals depends on your financial situation, risk tolerance, and investment horizon.

In general, private credit can be an attractive option when:

You want to benefit from a stable and regular cash flow.
You want to invest in an evergreen fund structure so you don’t have to look for a new fund every few years (as is the case with many other private credit solutions).
You’re looking for a semi-liquid solution.
You do not need liquidity during the fund’s lock-up period.
You can withstand the loss of your entire investment
You understand the credit and market risks associated with private credit.

Frequently Asked Questions about private credit

What is a fund of funds?

An investment fund that invests capital in other private equity, credit, or venture capital funds, thereby providing investors who do not have direct access to such funds with exposure to a portfolio of diverse funds.

What is the minimum investment amount?

For the Marktlink Capital Private Income Fund, the minimum investment amount is €100,000.

What are the risks of private credit?

The main risks associated with private income are credit risk, liquidity risk, interest rate risk, and market risk. It is possible to lose (part of) your investment.