A company borrows from a fund, not a bank

In private credit, a company can borrow from a fund, instead of a bank. That's private credit. Say a one billion dollar credit fund lends straight to mid-sized companies. Floating rates. Held to maturity. One lender, or a small group, so the terms get negotiated. Often with covenants. The interest comes back to the fund's investors. It has grown fast, as banks pulled back. So why do investors care? That growth is why regulators and investors watch it closely. The loan never leaves the fund.