{"id":5198,"date":"2026-11-11T01:55:58","date_gmt":"2026-11-11T00:55:58","guid":{"rendered":"https:\/\/www.ondara.group\/private-credit-lending-standards\/"},"modified":"2026-11-11T01:55:58","modified_gmt":"2026-11-11T00:55:58","slug":"private-credit-lending-standards","status":"publish","type":"post","link":"https:\/\/www.ondara.group\/en\/private-credit-lending-standards\/","title":{"rendered":"Private credit lending standards: what the Fed is measuring"},"content":{"rendered":"<p><strong>Private credit lending standards are the rules a lender uses to decide whom to lend to, how much, for how long and against what security; and since 9 November 2026 the US Federal Reserve has started measuring them for the first time in the US private credit market.<\/strong> For an investor looking at Spain, the news is a good prompt to ask the right question: what criteria were used to grant the loan I am investing in? This article is for information only and is not an investment recommendation.<\/p>\n<h2>What the Fed has announced on private credit<\/h2>\n<p>The Federal Reserve Banks of Dallas and New York opened a <a href=\"https:\/\/www.newyorkfed.org\/newsevents\/news\/markets\/2026\/20261109\" target=\"_blank\" rel=\"noopener\">pilot survey of the direct lending market<\/a> on 9 November 2026. It closes on 18 November and aggregate results will be published in the first quarter of 2027.<\/p>\n<p>It aims to understand three things: how much credit is being provided, how lending standards are evolving and what this means for the economy. The Fed itself acknowledges that, although the sector has grown strongly, regulators have limited visibility of new lending activity.<\/p>\n<p>A caveat is in order. Participation is voluntary, firm-level data are confidential and will not be used for supervisory purposes. This is not new regulation. It is a thermometer, similar to the one central banks have applied to banks for years.<\/p>\n<h2>Trends: what is happening worldwide and in Spain<\/h2>\n<ul>\n<li><strong>United States, 9 November 2026.<\/strong> The Dallas and New York Fed launch the pilot direct lending survey. If it works, it may become quarterly (<a href=\"https:\/\/www.newyorkfed.org\/newsevents\/news\/markets\/2026\/20261109\" target=\"_blank\" rel=\"noopener\">Federal Reserve Bank of New York<\/a>).<\/li>\n<li><strong>Global, 10 November 2026.<\/strong> Goldman Sachs&#8217; global alternatives survey of 225 institutional investors shows 56% feel under-allocated to private credit (43% in 2025), while more than half see rising defaults as the biggest risk, according to <a href=\"https:\/\/alternativecreditinvestor.com\/2026\/11\/10\/private-credit-pushes-into-wealth-channel-as-investors-look-to-bulk-up-allocations\/\" target=\"_blank\" rel=\"noopener\">Alternative Credit Investor<\/a>. More demand and more concern about risk at the same time.<\/li>\n<li><strong>Spain, 27 October 2026.<\/strong> According to the Bank Lending Survey published by the <a href=\"https:\/\/www.bde.es\/f\/webbe\/GAP\/Secciones\/SalaPrensa\/NotasInformativas\/26\/presbe2026-101.pdf\" target=\"_blank\" rel=\"noopener\">Banco de Espa\u00f1a<\/a> (Spain&#8217;s central bank), credit standards for companies were unchanged in the third quarter, but terms tightened because of higher interest rates, and demand from SMEs fell. For the fourth quarter, banks expect to tighten supply to households.<\/li>\n<li><strong>Spain, 5 October 2026.<\/strong> The flash estimate from Spain&#8217;s Association of Property Registrars put August home sales at around 48,700, up 1.3% year on year; the Association warns that August is an atypical month. The figure is provisional.<\/li>\n<\/ul>\n<p>Read together, the message is simple: money keeps flowing into private debt, regulators want a clearer view of how it is lent and bank credit in Spain is not opening up. In that context, a private lender&#8217;s credit standards are the investor&#8217;s first risk filter.<\/p>\n<h2>Private credit lending standards: what they mean<\/h2>\n<p>Banks talk about &#8220;credit standards&#8221;: every step an institution takes to decide whether or not to grant a loan, as the Banco de Espa\u00f1a defines it. In private debt the idea is the same, but without the banking regulatory framework. Each lender sets its own rules, which is why they vary widely.<\/p>\n<p>When analysts say standards are &#8220;loosening&#8221;, they usually mean one of these changes: a higher loan amount relative to the collateral value, fewer contractual protections (covenants), longer terms, interest that is capitalised rather than paid, or less scrutiny of the borrower&#8217;s track record. We cover this in detail in our guide to <a href=\"https:\/\/www.ondara.group\/en\/covenants-real-estate-private-debt\/\">covenants in real estate private debt<\/a>.<\/p>\n<p><img data-dominant-color=\"817f77\" data-has-transparency=\"false\" style=\"--dominant-color: #817f77;\" decoding=\"async\" src=\"https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos.webp\" alt=\"Private credit lending criteria: financial documents, pen and calculator\" width=\"1680\" height=\"945\" class=\"aligncenter size-full wp-image-5194 not-transparent\" loading=\"lazy\" srcset=\"https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-200x113.webp 200w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-300x169.webp 300w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-400x225.webp 400w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-600x338.webp 600w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-768x432.webp 768w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-800x450.webp 800w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-1024x576.webp 1024w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-1200x675.webp 1200w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos-1536x864.webp 1536w, https:\/\/www.ondara.group\/wp-content\/uploads\/2026\/11\/criterios-concesion-deuda-privada-documentos.webp 1680w\" sizes=\"auto, (max-width: 1680px) 100vw, 1680px\" \/><\/p>\n<h2>Lending criteria an investor can review<\/h2>\n<p>You do not need to be a credit analyst to ask good questions. This table summarises the most common criteria in real estate-backed private debt and what to ask about each.<\/p>\n<div class=\"tabla-seo\">\n<table>\n<caption>Source: Ondara Group, based on common market practice, November 2026<\/caption>\n<thead>\n<tr>\n<th>Criterion<\/th>\n<th>What it measures<\/th>\n<th>Useful question for the investor<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>LTV (loan to value)<\/td>\n<td>Collateral cushion<\/td>\n<td>Which valuation is it based on and who signs it?<\/td>\n<\/tr>\n<tr>\n<td>Exit plan<\/td>\n<td>How the loan is repaid<\/td>\n<td>Sale, bank refinancing or both? What if it is delayed?<\/td>\n<\/tr>\n<tr>\n<td>Borrower<\/td>\n<td>Experience and solvency<\/td>\n<td>Has it delivered similar projects? Does it contribute equity?<\/td>\n<\/tr>\n<tr>\n<td>Security and ranking<\/td>\n<td>Repayment priority<\/td>\n<td>First-ranking mortgage? Any additional security?<\/td>\n<\/tr>\n<tr>\n<td>Covenants and monitoring<\/td>\n<td>Control during the life of the loan<\/td>\n<td>What happens if a milestone is missed? How often is reporting?<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>To go deeper, see our guide to <a href=\"https:\/\/www.ondara.group\/en\/private-real-estate-debt-due-diligence\/\">due diligence in private real estate debt<\/a> and our article on <a href=\"https:\/\/www.ondara.group\/en\/private-debt-valuation-investor-questions\/\">private debt valuation and the questions investors should ask<\/a>.<\/p>\n<h2>Illustrative example: how the cushion changes with LTV<\/h2>\n<p>Looser credit standards show up above all in LTV. Consider an <strong>illustrative, hypothetical example<\/strong>: a property valued at EUR 2,000,000 and enforcement and sale costs of 10% of value. How far could the value fall before the sale proceeds no longer cover the principal? To keep it simple, we exclude unpaid interest and court timelines, which would reduce the margin further.<\/p>\n<div class=\"tabla-seo\">\n<table>\n<caption>Illustrative example prepared by Ondara Group, November 2026<\/caption>\n<thead>\n<tr>\n<th>LTV<\/th>\n<th>Loan<\/th>\n<th>Minimum value to cover principal<\/th>\n<th>Tolerable fall in value<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>50%<\/td>\n<td>EUR 1,000,000<\/td>\n<td>EUR 1,111,111<\/td>\n<td>44.4%<\/td>\n<\/tr>\n<tr>\n<td>60%<\/td>\n<td>EUR 1,200,000<\/td>\n<td>EUR 1,333,333<\/td>\n<td>33.3%<\/td>\n<\/tr>\n<tr>\n<td>70%<\/td>\n<td>EUR 1,400,000<\/td>\n<td>EUR 1,555,556<\/td>\n<td>22.2%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>Ten more points of LTV cut the cushion by roughly eleven points of tolerable fall in value. The figures are hypothetical, but they show why regulators watch standards: small changes in lending translate into much less protection if the market turns.<\/p>\n<h2>How we apply this at Ondara Group<\/h2>\n<p>At <a href=\"https:\/\/www.ondara.group\/en\/who-we-are\/\">Ondara Group<\/a> we have structured real estate-backed private debt transactions since 2018. Each transaction is analysed individually: the asset used as collateral, its value, the exit plan and the borrower&#8217;s profile. We seek diversification across transactions and keep a direct relationship with investors, who can ask the management team about each of these criteria.<\/p>\n<p>Ondara targets double-digit returns, always as a target and never guaranteed. The minimum investment is EUR 25,000.<\/p>\n<h2>Risks to consider<\/h2>\n<ul>\n<li><strong>Loss of capital.<\/strong> All investments carry risk, including the partial or total loss of the capital invested.<\/li>\n<li><strong>Collateral does not cover everything.<\/strong> Real estate security mitigates risk but does not eliminate it: values can fall and enforcement takes time and money.<\/li>\n<li><strong>Illiquidity and term.<\/strong> Private debt usually cannot be sold before maturity, and terms can be extended.<\/li>\n<li><strong>Limited information.<\/strong> The sector is less transparent than banking; the Fed&#8217;s survey exists precisely because data are scarce.<\/li>\n<li><strong>Change in the cycle.<\/strong> With higher rates and fewer transactions, exits through sale or refinancing may be delayed.<\/li>\n<\/ul>\n<h2>Frequently asked questions<\/h2>\n<h3>What are private credit lending standards?<\/h3>\n<p>They are the criteria a private lender uses to decide whether to lend, how much, for how long and with what security and terms.<\/p>\n<h3>Does the Fed survey regulate private credit?<\/h3>\n<p>No. It is a voluntary, confidential survey to gather aggregate information; the Fed states it will not be used for supervision.<\/p>\n<h3>Does it affect investors in Spain?<\/h3>\n<p>Not directly. But if it shows looser standards in the United States, it may shape the global perception of risk in the sector.<\/p>\n<h3>Which criterion matters most in a real estate-backed loan?<\/h3>\n<p>There is no single one. LTV shows the cushion, but without a realistic exit plan and a solvent borrower the collateral may not be enough.<\/p>\n<h3>Does a low LTV mean there will be no losses?<\/h3>\n<p>No. It reduces risk, but the property&#8217;s value, costs and enforcement timelines can still lead to losses.<\/p>\n<h2>In summary<\/h2>\n<ul>\n<li>On 9 November 2026 the Fed opened its first survey of lending standards in direct lending.<\/li>\n<li>Institutional investors want more private credit but worry about rising defaults.<\/li>\n<li>In Spain, banks kept standards for companies unchanged but tightened terms because of rates.<\/li>\n<li>For investors, reviewing LTV, exit plan, borrower, security and covenants is the best defence.<\/li>\n<li>All investments carry risks, including the loss of capital.<\/li>\n<\/ul>\n<p>If you would like to know how we invest, <strong><a href=\"https:\/\/www.ondara.group\/en\/investors\/\">register as an investor<\/a><\/strong> and we will explain how it works. The minimum investment is EUR 25,000.<\/p>\n<p><em>This article is for information purposes only and does not constitute an investment recommendation or financial advice. All investments carry risks, including the possible loss of the capital invested, and past or target returns do not guarantee future returns. Analyse each opportunity with a professional before investing.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Private credit lending standards: what the Fed&#8217;s new survey measures, what is happening in Spain and which criteria to review before investing in secured debt.<\/p>\n","protected":false},"author":1,"featured_media":5191,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,22],"tags":[],"class_list":["post-5198","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-inversiones-alterativas","category-private-credit"],"_links":{"self":[{"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/posts\/5198","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/comments?post=5198"}],"version-history":[{"count":0,"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/posts\/5198\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/media\/5191"}],"wp:attachment":[{"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/media?parent=5198"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/categories?post=5198"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ondara.group\/en\/wp-json\/wp\/v2\/tags?post=5198"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}