Swiss businesses are struggling to access financing and other financial services, opening up an opportunity for private credit funds in the heavily banked market, according to market sources.

Since the collapse of Credit Suisse in 2023, Switzerland has had only one major bank, UBS, which dominates the market with c. USD 160bn market cap and USD 7.3tn in invested assets (end-1H26).

There are many local or cantonal banks, such as Zürcher Kantonalbank (ZKB), which has a AAA credit rating from all three major agencies, and Banque Cantonale Vaudoise (BCV). But these tend to be conservative and to prioritise local relationships, making them unsuitable or difficult to access for some businesses, according to market sources.

“It can be quite concerning to see what lengths some companies go to here to obtain financing” Christine Hohl, a partner at Swiss law firm Wenger Plattner, said. “There certainly appears to be a gap in the provision of banking services and financing solutions in certain sectors and/or client segments. Even where they are able to access such services or funding, the service or the conditions may not always be very good as the banks know the client has limited alternatives. This could present an opportunity for alternative service or private credit providers.”

Hohl said that some clients were turning to the Swiss branch of their domestic banks, neobanks such as Revolut and even unnecessarily complex overseas structures in order to access financial services and funding. Revolut last year surpassed 10,000 business clients in the country and broadened its service offering.

Reto Ineichen, CEO of Alpinum Investment Management, which invests in private credit among other asset classes, said the priority for most businesses is still to develop another banking relationship so they are not reliant on UBS.

“The reason why you would go to a debt fund is that you want that flexibility and you are willing to pay up for it,” he said. “We have a lot of banks here. But if you have a complex of risky business model you may need to go to the private debt market, as there are certain services the cantonal banks can’t offer, and UBS has a more conservative approach nowadays.”

Growing activity

Direct lenders have been increasing their activity in Switzerland by both volume and deal count, albeit slowly and from a low base, according to Debtwire data. With 10 deals, the first quarter of 2026 was the busiest in the last two years.

There have been some prominent deals like the CHF 1.1bn loan from Apollo, which Blackstone used to fund its 2022 buyout of logistics firm VFS Global, or the EUR 1bn unitranche provided by GSAM to Colosseum Dental in 2024.

According to Houlihan Lokey data, unitranches accounted for 9, or 43%, of the 21 deals it tracked in the Alpine region (Austria and Switzerland) last year. That was the highest volume since 2021. Partners Group, which is headquartered in Zug, was the most active fund in both 1Q26 and 4Q25, the most recent quarters for which data is available.

However, the activity is still low compared to Germany, where funds completed 85 unitranche deals last year, 71% of the mid-cap lending market.

A local debt advisor said there has been some movement in the Swiss market since the fall of Credit Suisse, with a gradual increase in competition and lenders like Raiffeisen and Migros Bank stepping up. Lenders generally do not require a local banking license to operate.

However, there are gaps in the banking market as there are in other countries. Most banks, for example, take a lot of convincing to do committed acquisition facilities or ticket sizes of more than CHF 40m, the debt advisor said.

“That is where a debt fund can make sense: larger ticket sizes, committed acquisition facilities, speed, or situations where the banking market cannot provide enough quantum but the fund still has to come at a lower price than classic unitranche,” she said.

Supply chain and trade financing, as well as other specialised lending, have been particularly hit. Credit Suisse had USD 10bn in clients funds linked to the now defunct Greensill Capital, a supply chain finance company, which imploded in 2021. More recently, banks and debt funds have suffered losses on trade finance lines to US companies First Brands and Tricolor.

Cheap bank debt

The major constraint for debt funds is competing with Swiss banks on pricing. Local banks price on a margin above the Swiss Average Rate Overnight (SARON) (-0.08% at the time of writing) and can charge as low as 3% all in, according to the debt advisor.

Furthermore, around 99% of Swiss companies fall within the SME category and are therefore likely too small for classic unitranche funds.

The market is also too small for a local specialist or to attract in some foreign firms. Debt funds that are present in the market are more focused on fundraising than investing, argued the advisor.

“Swiss banks are just very competitive in terms of financing, so debt funds can only really compete from a certain size of the debt package or if the leverage is quite aggressive or they require a Buy & Build facility,” said a Swiss M&A advisor. “That said debt funds are slowly becoming more active in Switzerland.”

There is also a withholding tax in the country which comes into effect when more than 10 non-bank lenders are involved in a particular loan. There is a chance debt funds could be treated as more than one non-bank lender if the tax authority chooses to “look through” the fund structure to the investors behind it, creating an issue even for deals with a sole lender.

However, the challenges of tax, pricing and market size are not insurmountable. “The Swiss private credit opportunity exists, but it is not classic unitranche replacing banks,” said the debt advisor.