Consider this: global private credit assets under management exceeded USD $1.7 trillion in 2025, roughly doubling over five years. This is no longer a niche asset class; it is a capital base the size of Canada's entire GDP hunting for yield. An increasing share of that capital is now pointed at Canadian mid-market borrowers who have historically relied solely on traditional banking.
For BC founders and CFOs, the lending market of 2022 has been replaced by a more complex, yet potentially more rewarding, landscape.
Throughout 2025 and into 2026, Canadian chartered banks tightened commercial lending standards, citing elevated credit risk, rising capital requirements under Basel III, and a cautious outlook on commercial real estate. While the Big Six remain active, they have become more selective and slower, creating a pricing gap that has caught the attention of US-domiciled private credit managers.
Firms including Apollo Global Management, Ares Management, and Blue Owl Capital have expanded their Canadian origination capabilities, establishing local deal teams and advisory networks. They are targeting loans in the $10-million to $75-million range (CAD)—a segment that sits between the capabilities of most credit unions and the syndicated loan desks of the Big Six.
The structural logic is clear. US private credit funds, flush with capital from the 2021–2023 fundraising cycle, face significant deployment pressure. They view Canadian mid-market deals—backed by real assets and predictable cash flows—as attractive, risk-adjusted opportunities. To a New York credit desk, Canada offers a familiar legal framework with a stable operating environment.
This competition is largely positive for borrowers. Private credit spreads in Canada have compressed as new entrants vie for deal flow, resulting in tighter pricing, more flexible covenants, and faster execution. A bank credit committee operating on a 90-day approval cycle is at a structural disadvantage against a private credit fund with a shorter decision-making chain.
BC law firms, including Fasken and Blake, Cassels & Graydon, report increased instruction volumes on private credit deals. Technology, light manufacturing, logistics, and healthcare services are among the most active sectors.
These funds are not writing blank cheques; they prioritize businesses with defensible market positions and collateral comfort. This is a sophisticated alternative to senior secured bank lending, not venture debt.
BDC Capital's mid-market lending benchmarks offer a useful reference point for BC operators. While not automatically superior to bank debt, private credit provides the leverage necessary to negotiate better terms.
The practical playbook for CFOs is straightforward: engage an advisor with existing private credit relationships, approach the Canadian arms of US managers directly, and utilize BDC benchmarks as a floor. Most importantly, retain legal counsel experienced in private credit documentation, as covenant and reporting structures differ significantly from standard bank agreements.
The window is open, but it may not stay that way. As these funds build local reputations and deal flow, pricing power may shift back toward the lender. CFOs who act now will be better positioned to negotiate from a foundation of data rather than assumption.
What to watch:
- OSFI's next Senior Loan Officer Survey for signals on whether Canadian bank commercial credit standards are loosening.
- Whether US private credit managers begin establishing registered Canadian entities to reduce cross-border friction.
- The evolution of covenant terms, specifically the shift between maintenance and incurrence covenants.
- BDC Capital's published rate benchmarks as a quarterly reference point for market trends.
