Mid-market distressed debt: Preparing for the next downturn

David Karp, along with several other industry experts, joins Debtwire to examine how direct lending funds, BDCs and other nonbank lenders are preparing for a potential economic downturn and mounting stresses across the private credit market.

Industry participants warn that rapid growth, increased competition and weaker underwriting standards may leave many lenders vulnerable, particularly those lacking workout infrastructure and experience. While some firms are strengthening underwriting and liquidity strategies, uncertainty remains around how effectively the market will manage distressed assets and who will step in to provide liquidity during the next cycle.