Private Credit in Practice
As institutional investors and asset managers accelerate their move into private credit and asset-based finance, the practical experience a lender brings in how these models operate in the real economy has never been more important .
FOLK2FOLK, the UK’s largest peer-to-peer lender to business, has facilitated over £785m in loans to small and medium-sized enterprises (SMEs) since 2013. Every loan is secured against land or property, giving investors tangible asset-backed exposure while providing businesses with an accessible alternative to traditional bank finance.
Kawai Chung, who recently joined as Chief Executive Officer, believes the platform’s operational record offers valuable perspective as private credit moves centre stage.
“The growing focus on private credit and asset-based finance is a natural progression of the market,” he says. “But it’s worth remembering there are lenders with many years of practical experience – consistently delivering asset-backed lending that links investors’ capital directly to productive businesses.”
Private credit’s expanding role
Private credit has become one of the most discussed areas in financial markets. Global managers are expanding into asset-based strategies that seek returns supported by collateral rather than corporate cash flows. At the same time, capital and regulatory requirements continue to limit bank appetites, creating space for experienced non-bank lenders.
“Private credit now spans everything from large corporate direct lending to smaller asset-backed transactions,” notes Chung. “FOLK2FOLK operates at the practical end of that spectrum, where finance directly supports business activity in the real economy.”
A proven model
FOLK2FOLK’s approach blends property-backed discipline with a human-led credit process. Its interest-only business loans start from £100,000, with terms of up to five years and typical loan-to-value ratios of around 60%.
Founded in Cornwall, it was established to support entrepreneurs and landowners outside the cities who found themselves underserved by mainstream lenders. Since then, it has expanded nationally, supporting businesses across sectors such as agriculture, leisure and tourism, property development, and manufacturing – industries that underpin regional economies across the UK.
“Asset-based lending can sound abstract,” says Chung. “But at its heart, it’s about understanding the borrower and the asset. For us, it’s grounded in tangible value, where there’s a transparent link between investor capital and productive enterprise – from a farmer diversifying into agri-tourism, to a developer regenerating a local site. That’s the kind of lending FOLK2FOLK knows best.”
Experience and evidence
FOLK2FOLK’s lending record through periods of volatility, from Brexit to shifting interest rate cycles, has reinforced the durability of its approach.
“Markets move, but the fundamentals stay the same,” says Chung. “Strong security, sensible loan-to-values, and transparency. Those are the constants of successful lending.”
Looking ahead
As new entrants scale up in private credit, Chung believes the sector’s credibility will increasingly hinge on proven experience rather than ambition.
“Private credit is entering a new phase,” he says. “Its growth and credibility will depend as much on responsibility and experience as on capital. The lenders who’ve lived the realities of asset-backed finance day to day will have an essential role in shaping what comes next.”
Article originally published in Alternative Credit Investor on 26th November 2025.
