Private credit firms are purchasing billions of dollars in credit card debt and consumer loans. Blue Owl Capital and Goldman Sachs recently led a $1.2 billion funding deal for Bilt, a rent-rewards fintech. This transaction followed the exit of Bilt's previous partner bank, Wells Fargo.
Investors are utilizing forward-flow agreements to purchase future loans originated by fintechs and non-bank lenders. These arrangements allow lenders to continue operations without holding debt on their balance sheets. Private credit funds are targeting these high-yield returns as traditional banks reduce lending due to stricter capital requirements.