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Deciding which companies to lend to in the private credit space involves a structured approach using a four-quadrant model. Key factors considered include customer and supplier concentration, capital intensity, business valuation, and leverage profile. High customer concentration may pose risks, while capital-intensive businesses may struggle with cash flow due to significant capital expenditures. By assessing the interplay of these factors, lenders can make informed decisions, even choosing to lend to companies with inherent risks by adjusting their valuation or leverage accordingly.