JPMorgan Restricts Private Credit Loans Following Loan Value Reductions

JPMorgan Tightens Lending to Private Credit Funds Amid Industry Strains

JPMorgan Chase & Co. has begun limiting certain loans to private credit funds after reassessing the value of some assets in their portfolios, according to a source with knowledge of the situation. This move highlights growing pressures within the $1.8 trillion private credit sector.

The loans in question are tied to software companies—a segment that has recently drawn attention from investors, especially as concerns mount over how artificial intelligence could affect these businesses. The Financial Times was the first to report on JPMorgan's decision.

Top Stories from Bloomberg

At a recent leveraged finance conference, JPMorgan CEO Jamie Dimon told investors that the bank is exercising greater caution when lending against software-related assets. According to a person familiar with the matter, this step was taken as a precaution and is not the first time the bank has revalued such assets.

Unlike many competitors, JPMorgan maintains the authority to reassess the value of private credit holdings at any time, while other institutions typically require specific events, such as missed payments, to trigger a revaluation. Executives in the private credit industry noted that they have not observed similar actions from other banks, as reported by the Financial Times.

JPMorgan declined to provide a statement. Following the Financial Times article, US equity index futures trimmed earlier gains, with S&P 500 contracts rising 0.3% after previously climbing 0.5%.

Back in October, Dimon cautioned that more issues could emerge in the opaque and previously booming private lending market, where pricing information is often not publicly available. Despite these warnings, some investors have downplayed concerns about rising default rates and broader risks in the sector.

Investor anxiety has grown in recent weeks, fueled by worries over how artificial intelligence might impact borrowers and ongoing questions about asset valuations. Last month, Blue Owl Capital Inc. suspended quarterly redemptions from one of its funds and started selling assets to return capital to investors.

Earlier this month, over 25 senior executives at Blackstone Inc. stepped in to support the firm’s main private credit fund, which faced a record $3.8 billion redemption request. Meanwhile, BlackRock Inc. limited withdrawals from its $26 billion HPS Corporate Lending Fund, capping redemptions at 5% after a surge in client requests.

Major Wall Street banks have been key backers of the private credit market, providing around $300 billion in loans to credit funds as of late June, according to Moody’s Ratings and Federal Reserve data. JPMorgan’s exposure to private credit stood at $22.2 billion, the report indicated.

Challenges Facing Private Credit Lending

Rather than directly lending to high-yield or unrated borrowers, banks have increasingly chosen to finance private credit lenders, viewing this as a safer way to benefit from the asset class’s rapid expansion.

However, this approach has come under scrutiny following the recent collapse of UK mortgage lender Market Financial Solutions Ltd. (MFS).

MFS, which had borrowed over £2 billion ($2.7 billion) from institutions including Barclays Plc and Apollo Global Management Inc.’s Atlas SP Partners, was once considered one of the UK’s largest providers of short-term bridge loans before its failure on February 25.

Reporting assistance by Ambereen Choudhury and Megawati Wijaya.

Most Popular from Bloomberg Businessweek

©2026 Bloomberg L.P.