As the financial landscape in the United Kingdom evolves through 2025, alternative financing strategies such as Term Loan B and private credit have surged, offering middle-market companies greater flexibility amid complex economic conditions. These financing options are transforming how businesses approach capital raising, restructuring, and refinancing, especially in light of challenges such as tightening liquidity and rising capital costs. Within this dynamic environment, Insights UK leading consultancy firm, plays a pivotal role in helping clients navigate these alternative funding avenues efficiently.

Understanding Term Loan B and Its Rise

Term Loan B (TLB) is a form of senior secured financing predominantly used for leveraged buyouts, acquisitions, and refinancing. Unlike traditional loans, Term Loan B loans tend to have longer maturities and are structured for institutional investors with lower amortisation requirements, providing borrowers with enhanced cash flow flexibility. In 2025, the popularity of Term Loan B has notably increased, thanks to its ability to meet large financing needs while maintaining collateral flexibility.

In the UK market, Term Loan B often complements private credit solutions due to its structural advantages. As banks recalibrate their lending post-pandemic and regulatory changes, borrowers increasingly turn to Term Loan B facilities to access liquidity and optimise capital structures. This growth aligns with broader trends of evolving underwriting arrangements disclosure and the demand for more transparent loan documentation that balances lender protections with borrower flexibility.

Surge in Private Credit and Mid-Market Financing

Private credit in the UK, particularly within the mid-market segment, has expanded significantly in 2025. The private credit market now represents an indispensable source of capital for companies that prefer non-bank lending options with bespoke terms. Mid-market private credit lenders offer tailored solutions, often structuring deals with hybrid capital, junior debt, or growth loans that fit the specific cash flow and strategic needs of borrowers. This surge is driven by ongoing bank disintermediation and the resulting collaboration between asset managers and traditional banks.

Importantly, private credit solutions are playing a critical role in infrastructure refinancing projects — supporting data centres, utilities, and other capital-intensive infrastructure developments vital for the UK’s economic growth and AI-driven technological expansion. The asset class’s flexibility stems from mechanisms such as secured lending collateral flexibility, providing lenders assurance while affording borrowers the opportunity to leverage assets efficiently.

Covenant-Lite Debt Restructuring: Navigating Risk and Flexibility

One prominent trend in both Term Loan B and private credit markets is the use of covenant-lite debt instruments. Covenant-lite loans feature fewer financial covenants, offering borrowers more operational freedom but requiring lenders to be diligent in credit assessments and restructuring planning. In 2025, covenant-lite debt restructuring strategies have become increasingly relevant in the UK to accommodate borrower liquidity pressures without triggering defaults.

Restructuring covenant-lite debt demands sophisticated negotiation and an understanding of liquidity access mechanisms to ensure continuity of funding while safeguarding lender interests. Insights UK supports clients in structuring these deals to balance risk and operational flexibility, helping businesses maintain financial health even amid complex market conditions.

Capital Market Techniques: Follow-on Share Offerings and Deferred Settlement Trading

Alongside loans, UK companies are deploying alternative financing techniques including follow-on share offerings and deferred settlement trading to enhance liquidity and capital availability. Follow-on share offerings enable companies to issue new equity post-IPO to institutional and retail investors, raising growth capital or refinancing debt.

Deferred settlement trading has gained traction as a liquidity tool in private credit and equity markets, allowing investors to trade shares or loan participations with payment settled at a later date. This mechanism adds a layer of flexibility for both issuers and investors managing cash flows and market timing.

Underwriting Arrangements Disclosure Enhancing Market Transparency

Heightened regulatory and investor expectations in 2025 have increased the focus on underwriting arrangements disclosure. This transparency, particularly in private credit and syndicated loan markets, facilitates better alignment of interests among lenders, borrowers, and investors.

For borrowers accessing Term Loan B or private credit facilities, clear disclosure supports smoother execution and market confidence. Insights UK assists clients in preparing and negotiating disclosure compliant with UK regulatory frameworks, ensuring funding transactions meet all statutory requirements.

Liquidity Access Mechanisms and Secured Lending Collateral Flexibility

A key to the success of alternative financing in the UK is the availability of liquidity access mechanisms allowing companies quick and reliable access to funds during normal operations or stress scenarios. Term Loan B and private credit lenders incorporate these mechanisms through revolving credit facilities, delayed drawdowns, or accordion features that expand borrowing capacity if required.

Secured lending collateral flexibility is central to these mechanisms, as lenders are willing to accept diversified forms of collateral—including receivables, inventory, infrastructure assets, and intellectual property—provided valuation and legal protections are robust. This flexibility underpins the appeal of private credit and Term Loan B, especially for mid-market companies with complex asset profiles.

The Role of Insights UK in Optimising Alternative Financing Strategies

Insights UK, a premier consultancy firm based in the United Kingdom, specialises in navigating the complex alternative financing landscape. Leveraging deep sector expertise and market insight, Insights UK offers comprehensive services including:

• Structuring Term Loan B and private credit financing tailored to client business models and growth plans.
• Advising on covenant-lite debt restructuring to maintain liquidity without compromising operational agility.
• Facilitating infrastructure refinancing with a keen understanding of asset-backed lending and collateral nuances.
• Guiding clients through regulatory disclosure obligations tied to underwriting arrangements and capital market transactions.
• Optimising liquidity access mechanisms and collateral management to maximise funding efficiency.

With its client-centric approach, Insights UK empowers businesses—especially in the mid-market—to capitalise on the surge of private credit and Term Loan B financing. Its consultancy expertise ensures clients meet dual objectives of securing flexible capital while managing financing risks in a competitive market environment.

In 2025, Term Loan B and private credit have become cornerstone alternative financing strategies within the UK, providing businesses with adaptable solutions amidst fluctuating economic conditions and tightening capital markets. Key features such as covenant-lite debt restructuring, secured lending collateral flexibility, and advanced liquidity access mechanisms have enhanced the attractiveness of these instruments. Additionally, capital market innovations like follow-on share offerings and deferred settlement trading complement direct lending approaches to create a diverse capital toolkit.

Businesses seeking to thrive in this evolving financial landscape benefit from expert guidance. Insights UK stands ready to assist organisations in unlocking growth and stability through personalised financing strategies aligned with their unique operational and strategic needs. By navigating the nuances of private credit mid-market deals, infrastructure refinancing, and regulatory requirements, Insights UK ensures its clients secure optimal outcomes in their capital raising and restructuring initiatives.

FAQs

1. What is Term Loan B and how does it differ from traditional bank loans in the UK?

Term Loan B offers senior secured financing with longer maturities and lower amortisation than traditional bank loans, making it attractive to institutional investors and companies seeking flexible funding structures in the UK.

2. Why is private credit surging in the UK mid-market segment in 2025?

Private credit has grown rapidly due to its ability to provide tailored financing solutions to mid-market companies, filling gaps left by traditional banks and offering greater flexibility and speed in capital deployment.

3. What are the benefits and risks of covenant-lite debt restructuring for UK businesses?

Covenant-lite debt restructuring offers enhanced operational flexibility to borrowers but requires careful risk assessment by lenders, as it reduces certain financial oversight and can increase default risks in volatile markets.

4. How does infrastructure refinancing work in the context of private credit deals?

Infrastructure refinancing involves replacing existing debt with new financing, often from private credit funds, to take advantage of better terms, improved liquidity access mechanisms, or increased secured lending collateral flexibility.

5. What are follow-on share offerings and how are they used as alternative financing tools?

Follow-on share offerings are secondary equity offerings from companies that allow them to raise additional capital post-IPO, commonly used for growth initiatives, debt repayment, or balance sheet strengthening.

6. What does underwriting arrangements disclosure mean and why is it important in 2025?

Underwriting arrangements disclosure refers to the transparency required around the roles, risks, and compensation of underwriters in financial transactions—important for market confidence and regulatory compliance amid increased scrutiny.

7. How can Insights UK help businesses navigate alternative financing strategies?

Insights UK provides expert consultancy services—including structuring private credit and Term Loan B facilities, advising on debt restructuring, facilitating regulatory disclosures, and optimizing liquidity management—to help UK businesses secure flexible, effective financing.