Private Credit is a growing market in the US and globally. A recent estimate places the US market at over $1.25 trillion. While still relatively small in comparison to bank lending and the bond market, private credit is an asset class that is gaining popularity due to the anticipated risk-adjusted returns. Large asset managers have recognized this demand and have stepped in to offer private credit funds.
Percent is a new online investment platform for private credit offerings that reports the possibility of generating 20% annual returns. The platform claims higher yields and shorter duration, with offerings ranging from 6 to 36 months, typically under $5 million. Percent caters to both institutions and individuals (Accredited), with vetted deals that are managed by the Percent team. Percent reports that less than 10% of deals are listed on their marketplace, and default rates stand at around 2.5%. Gross returns, after losses, are currently reported at 14.6%. Percent claims nearly 45,000 investors, including institutions and accredited investors, participating on their platform.
Last month, Percent distributed an update that said private credit would dominate the financial landscape in 2025.
At that time, Nelson Chu, founder and CEO of Percent said the asset class continues to display resilience and appeal.
“Yet, the lower middle market remains a largely untapped frontier, where financing gaps left by traditional lenders are most pronounced. This segment offers a unique opportunity to diversify portfolios, provide inflation protection, and unlock value in ways that larger players can’t replicate. It’s here, in this underserved space, where private credit will not just hold its ground, but thrive.”
Recently, CI connected with Chu to inquire about opportunities in private credit and his perspective on the future of this asset class and online investing. Our discussion is shared below.
Private credit markets are huge and growing quickly. Why have we seen such rapid growth?
Nelson Chu: Private credit is booming, with markets now topping $3.14 trillion (according to JPMorgan) and growing fast. When banks pulled back after the 2008 financial crisis and were subsequently hand-tied by tougher regulations and tighter lending rules, private credit stepped in with speed, flexibility, and customized financing. This didn’t start the boom but it accelerated it.
Borrowers have increasingly turned to private credit for growth capital or refinancing because of its tailored and efficient funding. For investors, the asset class is attractive for many reasons. From diversifying their portfolios, offering higher yields, steady income, and/or shorter-term deals – all key benefits in today’s volatile markets. These factors come together to create the perfect environment for private credit to grow.
Its undeniable momentum is reshaping how businesses access funding and how investors diversify their portfolios. The combination of unmet demand, technological advancements, and strong performance continues to fuel private credit’s rapid expansion.
Percent focuses on short-term debt. What type of credit offerings do you offer for investors?
Nelson Chu: We specialize in short-term, lower to middle-market sub $25 million private credit investments, offering a wide range of asset classes for investors. These include asset-backed securities such as SMB financing, consumer loans, and merchant cash advances. Investors can also access corporate loans, including cash-flow lending and venture debt, which can generate returns of 20%+ with recurring income opportunities.
With minimum investments starting at just $500, we make private credit accessible to institutional and accredited investors alike. Additionally, we offer limited partner investments and innovative Blended Notes, which provide diversified exposure across multiple asset classes for balanced risk and return. By combining high-yield opportunities with transparency and accessibility, Percent is delivering a powerful solution for modern investors seeking more diversified, short-term debt options.
Do you mainly work with institutions? If so, which firms are you engaged with today?
Nelson Chu: Percent serves both accredited individual investors and institutional investors, including family offices, RIAs, and funds. Our platform enables both groups to access a wide range of private credit investments carefully vetted to offer high yields, portfolio diversification, and a hedge against inflation and market instability.
Currently approximately 60% of deals on Percent’s platform are funded by accredited retail investors, while 40% come from institutional investors. We have seen strong momentum among accredited individual investors and anticipate continued growth in this segment as private credit continues to showcase itself as an attractive asset class for diversifying portfolios.
How does Percent differ from P2P/Marketplace platforms?
Nelson Chu: Percent differentiates itself from other platforms by providing a comprehensive solution for the entire private credit ecosystem – bringing together investors, borrowers, and underwriters in one streamlined platform. Rather than focusing solely on connecting lenders and borrowers, we enable transparency, standardization, and efficiency across the deal lifecycle, from origination to repayment.
As an SEC-regulated broker-dealer, we align our interests closely with those of our investors – unlike platforms without broker-dealer status, which often lack safeguards and obligations for investor protection. Our platform provides access to institutional-quality deals and advanced diligence tools, setting us apart from others in the market. We also have rigorous standards for sourcing borrowers and underwriters to ensure a diverse and high-quality pipeline of opportunities, delivering exceptional value and security to our investors.
What makes us unique is our focus on the underserved, lower-to-middle-market, handling deals under $25 million that larger players overlook and banks won’t serve. This space offers attractive opportunities to diversify portfolios and mitigate risk while addressing gaps left by tightening traditional lending standards.
We also raise the bar on transparency within the asset class. Through real-time performance data, robust due diligence, and standardized deal structures, we ensure investors have the tools to make informed decisions. Combined with accessible entry points, like investment minimums as low as $500 and shorter durations averaging 10 months, Percent opens private credit to a wider audience while maintaining unparalleled accountability and control.
Can you expand upon this statement: “Investors navigating the universe of publicly traded bonds must often accept lower credit quality if they seek higher return potential,” and private credit may provide superior risk-adjusted returns.”
Nelson Chu: There’s long been a perception in investing that higher returns require taking on significant risk. In the world of publicly traded bonds, this often holds true – investors face a tough tradeoff: stick with safer options like government bonds for lower returns, or chase higher yields with riskier corporate bonds and risk exposure to greater default risks.
Private credit, however, is changing this perception. With platforms like ours, investors now have tools to analyze and manage risk with unprecedented visibility and precision. Our modern infrastructure enables investors to access and evaluate high-quality private credit deals, delivering transparency and customization.
With private credit, investors can tailor their risk-reward profiles, aligning investments with their specific goals while maintaining superior risk-adjusted return potential. It’s not just about finding higher returns; it’s about doing so in a way that prioritizes informed decision-making and better risk management. This is a key advantage in today’s evolving market landscape.
Do you originate some of your offerings? How do you source the securities?
Nelson Chu: Percent does underwrite and originate several offerings on our platform. We source through inbound applications through our website and referrals (many from existing borrowers), and through collaborations with a network of trusted underwriters, investors, and emerging fintech companies, ensuring a steady pipeline of high-quality opportunities.
Who are your competitors? How is Percent better?
Nelson Chu: Percent’s edge lies in its comprehensive infrastructure, which goes far beyond what competitors like Figure, Yieldstreet, and Capchase offer. While others may focus on isolated aspects of private credit, we power the only platform that integrates the entire ecosystem – investors, borrowers, and underwriters – into one seamless solution, which bolsters our ability to provide full transparency.
Our technology replaces outdated methods – think Excel sheets, phone calls, and email threads – with modern tools for deal sourcing, structuring, syndication, surveillance, and servicing. This approach doesn’t just streamline workflows – it sets new standards for transparency and reliability in the private credit sector that historically did not exist.
We also provide unparalleled access to deal data, empowering market participants to make data-driven decisions. Investors can analyze historical and ongoing deal performance in real time, while borrowers and underwriters benefit from standardized processes that improve speed and predictability. We have made private credit more accessible, accountable, and scalable than ever before.
What are your expectations for 2025? Interest rates? The Trump administration?
Nelson Chu: In 2025, we anticipate the private credit industry will continue maturing, with growth in leverage, redemption risks, and the development of a more active secondary market. Investor demand is expected to rise, and ongoing diversification within private credit will create new opportunities for both borrowers and investors.
Interest rates are likely to remain higher for longer, which would benefit floating-rate private credit investments. However, if rates decline, we could see increased borrowing activity as companies seek financing, intensifying competition in the market. Additionally, private credit will remain a valuable hedge against inflation, protecting portfolios from potential economic shocks.
As for the new administration, proposed tariff increases could put pressure on small businesses, driving up operational and supply chain costs while shrinking profit margins. This environment may lead to greater reliance on private credit as small businesses will increasingly seek flexible and timely funding solutions to navigate these challenges.