# Understand the obligation behind the investment.

Canonical page: https://finanzer.ai/learn/private-credit

> Private credit describes lending arranged outside publicly traded debt markets. The contract and the borrower’s ability to repay determine the exposure.

Private credit describes lending arranged outside publicly traded debt markets. The contract and the borrower’s ability to repay determine the exposure.

## Start with what is being financed.

A receivable, business facility and merchant advance have different evidence, repayment sources and legal structures.

## Separate contractual income from realised return.

Interest and fees may be contractually due without being received. Defaults, costs, recoveries and payment timing affect the result.

## Look beyond origination.

Monitoring, concentration, servicing, valuation and recovery are part of operating credit. The lender needs a record that follows the asset after funding.

## Private credit questions

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