Supply and sentiment are out of phase

Six years on from the start of 2020, the lower-mid-market borrower faces a deeper and more competitive field of capital than at any point in those six years. Private-debt deal flow is near a record, the Bank Rate has come off its peak to 3.75%, and yet CFO appetite for risk sits near its lowest in years. Supply and sentiment are out of phase. That gap is the most useful thing a borrower can understand about this market.

This is the desk’s periodic stock-take. It is not a forecast; it is a reading of where the market actually sits, drawn from the data the major houses have published, re-expressed in our own terms. Three charts carry the story: the supply of capital, the price of it, and the mood of the people borrowing it. They do not point the same way.

The supply side broadened structurally

Start with supply, because it is the part that has changed permanently. On Deloitte’s tracker, the trailing-twelve-month count of European private-debt deals roughly doubled from its end-2020 trough of about 385 to a record 895 in the year to June 2025. The line dips through the 2022–23 rate shock, as every credit market did, but rather than breaking it recovers to a new high. That is the signature of a structural shift rather than a cyclical one: a whole class of lender that did not meaningfully exist fifteen years ago is now a permanent, growing part of the field a borrower can run a process across.

The rate round trip

The price of money made a full round trip in the same window. The Bank Rate was cut to an emergency 0.10% in March 2020, climbed in fourteen steps to a 5.25% peak by August 2023, and has since descended to 3.75%. For a borrower, the level matters less than the direction and the lesson. Anyone who locked long-dated debt in 2021 borrowed at the bottom; anyone refinancing in 2023 met the top. Today’s rate is well off that peak but not back to the old floor, and it is the cost base against which every facility maturing into the 2026 wall will be repriced.

Sentiment never caught up

Now the mood. Deloitte’s CFO Survey asks whether it is a good time to take greater risk onto the balance sheet, and the answer has stayed stubbornly low. The reading ran at 20% in early 2024, fell to 12% a year later, ticked back to 17% by mid-2025, and then dropped to just 9% in the Q1 2026 survey — barely a third of the long-run average of around 25%. Earlier in the cycle risk appetite had swung far wider, from the depths of the 2020 and 2022 shocks to a post-pandemic high in 2021, but it has spent the whole rate-cutting phase below its own average. The caution is real, but it measures appetite for risk rather than the availability of credit. Lenders are not retreating; borrowers are hesitating.

What the desk takes from six years

The through-line of 2020 to 2026 is that supply broadened structurally while sentiment stayed cyclical, and the two are now visibly out of phase. Record lender capacity has arrived at the same moment as the maturity wall crests and borrower confidence sits near its lows. For most companies that reads as a warning. For a prepared one it is a rare configuration in which the borrower, rather than the lender, holds the leverage.

None of which changes the desk’s standing advice, because the advice was never about the cycle. Run a competitive process across the whole field of lenders. Start early, especially into the 2026 wall, so the option to wait stays yours. And refinance from strength, while the numbers are good and the calendar is open, rather than from the weakness of a maturity bearing down. The market has rarely made that advice easier to act on than it is right now.