Bhenoy Dembla is a Miami Beach, Florida-based venture capitalist and philanthropist with more than 30 years of experience across manufacturing, engineering, and finance. He spent roughly two decades in the chemical manufacturing industry, including nearly ten years with General Chemical Corp (previously part of Honeywell), where he advanced from analyst to head of Eastern Region and Midwest Sales, and he later served as a business development, marketing, and sales vice president with Fob.com. Today, Bhenoy Dembla focuses on raising capital for startups in real estate, hospitality, entertainment, technology, and storage, and he serves as an advisory board director for Precision Rubber Industries Private Limited. He holds a BS in Electrical Engineering from Syracuse University and an MBA from the Simon Business School at the University of Rochester, and he supports several charitable foundations. Here, he explains why businesses increasingly turn to private credit for financing.
Private credit has emerged as an increasingly important source of funding, particularly for companies that need flexible financing structures, faster execution, or solutions tailored to their specific circumstances. As private credit markets have expanded, businesses across industries have increasingly turned to private lenders to fund acquisitions, expansion, refinancing, working capital, and other strategic initiatives.
Private credit generally involves loans or other forms of debt financing provided by non-bank lenders, such as private credit funds, investment firms, and other institutional investors. Unlike traditional bank lending, private credit can offer borrowers greater flexibility in structuring transactions. Loan terms, repayment schedules, covenants, and other conditions can often be negotiated around the company’s financial position and the purpose of the financing.
Private credit serves businesses that do not fit neatly into conventional bank lending criteria. A company may have strong cash flow and attractive growth prospects but lack a long operating history, have an unusual capital structure, or be pursuing a transaction that requires a customized financing arrangement. Private lenders can potentially structure financing around these circumstances rather than relying exclusively on standardized lending requirements.
Companies and private equity sponsors may use private debt financing to fund acquisitions, recapitalizations, management buyouts, or other strategic transactions. In an acquisition, for example, a company may combine its existing capital with a private loan to finance the purchase of another business. This allows the buyer to access a larger pool of capital without contributing the entire purchase price through equity.
Private-equity sponsors can use private debt alongside their own equity investment as part of a transaction’s capital structure. In evaluating the financing, a private lender may consider the borrower’s cash flows, assets, financial projections, business model, and overall risk profile. The parties can then negotiate features such as interest rates, repayment schedules, covenants, and collateral requirements around the circumstances of the transaction.
Growth initiatives can also require substantial financing. Businesses may need capital to open new locations, expand production, invest in technology, hire employees, or enter new markets. Private credit can provide funding while allowing existing owners to retain a greater portion of their equity than they might if they funded growth primarily by selling additional ownership interests.
For lenders, private credit can provide an opportunity to generate income from lending to businesses. For borrowers, however, private credit is not simply a readily available source of capital. Interest rates, fees, collateral requirements, financial covenants, and repayment obligations can vary significantly from one transaction to another.
Companies therefore need to evaluate the total cost and structure of financing carefully.
The relationship between borrower and lender can also matter. Private credit transactions often involve direct communication between companies and lenders. This can allow both parties to develop a clearer understanding of the business, its objectives, and the risks associated with a particular financing arrangement.
For companies pursuing complex transactions, that direct relationship may be valuable throughout the life of a loan.
Private credit has consequently become an important part of the broader financing landscape. Businesses may turn to private lenders when they value flexibility, speed, customized structures, or access to capital for transactions that may not align perfectly with traditional bank lending models.
About Bhenoy Dembla
Bhenoy Dembla is a Miami Beach, Florida-based venture capitalist and philanthropist with more than 30 years of experience in manufacturing, engineering, and finance. He spent nearly a decade with General Chemical Corp before serving as a business development, marketing, and sales vice president with Fob.com, and now raises capital for startups in real estate, hospitality, entertainment, technology, and storage. He holds a BS in Electrical Engineering from Syracuse University and an MBA from the Simon Business School at the University of Rochester, and supports several charitable foundations.