The last 12 months have seen continued growth in the number of direct lending deals. Sponsors and owner-manager businesses have become increasingly familiar with the private debt market and its ability to deliver quick and flexible access to capital which can often be a struggle for traditional banks. 

Institutional money also continues to flow into this asset class with 6-8% yield offered by private debt considered a healthy, low-risk return for asset managers. Strong investor demand and underlying economic drivers have evolved private debt into a "sizeable, influential asset class in its own right".

The question now is whether this growth trajectory will continue. As interest rates begin to creep upwards, competition from traditional banks may intensify as they consider increasing their lending appetite. With traditional banks able to offer cheap capital on relatively competitive terms it will be interesting to see whether this has any impact on the growth trajectory of the direct lending market.

How this dynamic plays out through 2018 is uncertain. What is certain is that as competition continues to increase, so will the ability for borrowers to secure financing packages at ever more competitive pricing and terms.