Private credit firms—those lenders that provide loans outside traditional banks—are sitting on a mountain of cash, but there’s a hitch: deal activity is sluggish, especially in buyouts. With fewer opportunities to deploy all that money, competition is driving down loan prices, squeezing profits for lenders. It’s a classic case of too much supply and not enough demand.

Editor’s Note: This isn’t just a niche finance problem—it’s a sign of broader economic sluggishness. When private credit dries up or gets too cheap, it can ripple through everything from corporate takeovers to startup funding. If lenders stay stuck in this rut, it could mean fewer deals getting done and tighter margins for investors. Not great for anyone banking on a hot market.