Platform strength shines through market uncertainty
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Following a strong 2024, Percent accelerated its growth trajectory through the first half of 2025, solidifying our position as the premier marketplace for asset-based private credit. This performance stands out against a backdrop of heightened market volatility, policy uncertainty, and shifting economic narratives.
Q2 2025 set new platform records, with $133.9 million funded across 63 deals—our strongest quarter ever for issuance volume. These transactions delivered a 16.6% current weighted average coupon with an average investment term of 17.1 months. This represents a 10.7% increase in deal count and a 83.6% growth in issuance volume compared to Q2 2024. The surge in activity was largely driven by asset-based securities, which made up 77.6% of all funded deals.
Assets Under Management (AUM) climbed to $332.4 million, an all-time high and a 10.7% increase from Q1 2025. Excluding our Blended Note products ($52.7 million across all varieties), core AUM grew to $279.7 million, a remarkable $100.3 million increase year-over-year.
This robust quarterly performance builds on our market-tested foundation, which has now seen 636 deals fully repaid, returning over $1.2 billion in principal and $85.2 million in interest to investors who previously had limited access to this asset class.
Q2 2025 By The Numbers
Note: Net return after losses (charge offs) for Q2 2025 LTM 14.7%; Net returns after losses (charge-offs) and fees (servicing fees) for Q2 2025 LTM of 13.3%.
Asset-based notes were the primary driver of AUM growth in Q2, increasing by $27.9M, while outstanding corporate loans declined by $1.8M. This shift reflects our continued focus on structured, collateral-backed deals that deliver more durable yield opportunities.
With new deals launching weekly, our expanding marketplace gives investors the flexibility to build portfolios aligned with their personal yield targets, sector preferences, and risk tolerance.
Expanding the Borrower Ecosystem
In Q2, four new borrowers debuted on the Percent platform, each issuing asset-based securities and bringing specialized expertise across sectors:
New Borrowers
- Lily Advance ($1.0M across 1 deal): Tennessee-based provider of working capital solutions to small and medium-sized businesses, established in 2021.
- Lendistry ($1.7M across 1 deal): California-based minority-led small business lender offering loans, grants, and specialized financing programs through B.S.D. Capital, Inc.
- Golden Financial Solutions ($1.5M across 1 deal): Colorado-based alternative investment firm specializing in long-lifecycle litigated medical receivables financing.
- Funders App ($1.2M across 1 deal): Florida-based SMB financing provider with a track record dating to 2016.
New Programs from Longstanding Partners
Three established partners also expanded their presence with new programs, a testament to the deepening relationships and trust we build with our partners.
- Wall Street Funding Junior ABS Program ($5.7M raised across 1 deal): This subordinated asset-based financing is secured by a second lien on Wall Street Funding’s portfolio of merchant cash advances.
- The Smarter Merchant Junior ABS Program ($3.3M raised across 1 deal): This asset-based financing provides junior capital to complement the capital raised from the senior participation on Percent.
- Fat Brands New ABS Program ($4.2M raised across 3 deals): The underlying promissory note is secured by the M-2 Bonds, which are in turn secured by the assets of an operating subsidiary of FAT Brands Inc. whose assets include franchise agreements.
All new offerings were structured as asset-based securities, reinforcing Percent’s growing expertise in this resilient private credit segment. Within asset-based financing, these borrowers span diverse asset classes, offering investors an expanding array of private credit exposure options.
Amid recent market volatility, Percent has strategically prioritized U.S.-based borrowers with business models demonstrating resilience to both tariff impacts and potential recessionary pressures. This focus aims to provide investors with more durable yield opportunities across economic cycles.
Investor Marketplace Performance: Consistent Returns during Volatile Markets
In the twelve months ending Q2 2025, investors earned $33.8 million in interest, with an average net return of 13.3% after servicing fees and losses—a testament to our platform’s ability to deliver durable performance amid shifting conditions.
The most striking aspect of this performance is the consistency of returns. Despite the exponential growth of our marketplace and volatility in the public markets, net returns after losses have held steady, demonstrating the largely uncorrelated nature of this asset class.
Transparency in Action: Active Workouts
Percent’s proactive approach to workouts is part of our commitment to transparency. As of quarter-end, twelve borrowers had active workout situations. Notably, nine of these twelve involve corporate loan structures, while only three are asset-based notes – underscoring the relative resilience of asset-based structures.
Key observations from our workout portfolio:
- Recovery Progress: Active recovery efforts continue across all workout situations, with timelines and expected outcomes varying by deal structure.
- Asset Type Resilience: Asset-based notes continue to demonstrate greater resilience and fewer workouts compared to corporate loans, affirming our strategic focus.
For complete transparency, we maintain detailed reporting on our Current Workouts and Historical Deals Charged-Off and Recoveries pages.
Market Insights & What Lies Ahead
Q2 2025 proved eventful on multiple fronts. President Trump’s March tariff announcement, significantly larger than anticipated, spooked markets, though implementation was gradually scaled back through ongoing negotiations. The VIX—a key volatility indicator—plummeted from crisis-level highs near 50 to more typical levels in the high teens. Equity markets rebounded to record highs, with the S&P surpassing previous peaks, while credit spreads tightened to prior lows. In essence, markets pivoted from recession fears to renewed expansion expectations.
Fitch Ratings recently noted that “Private credit markets remain resilient, despite recent challenges stemming from tariff-driven market volatility, slowing economic growth and a higher policy rate trajectory than initially anticipated at the beginning of the year.“
We’ve witnessed this resilience firsthand. Despite the tariff shock, investor engagement remained remarkably stable on our platform. Rather than withdrawals, we observed strategic reallocations within the platform as investors adjusted portfolios to align with evolving risk-return dynamics.
As we look ahead, private credit is poised for significant growth. Robust investor appetite, coupled with available dry powder, should keep origination active, but maintaining strong underwriting standards remains paramount. We anticipate increased segmentation as the market matures, with managers seeking to differentiate themselves through more specialized offerings. At Percent, we believe private credit will continue to offer attractive opportunities for those seeking yield and diversification. Careful selection and robust due diligence will be more important than ever.
For deeper insights into navigating these market dynamics, check out Founder and CEO Nelson Chu’s bi-weekly podcast, Founder Notes, where he shares unfiltered perspectives on private credit trends and building in volatile markets.
New Product Features and Announcements
This quarter, our product development efforts focused on platform performance and investor infrastructure—laying the groundwork for major feature releases later in 2025. Here’s what’s new:
- Cash Visibility Enhancements: We added a dedicated row in the Portfolio table to show idle cash—making it easier to track and deploy unallocated funds.
- Deal & Manager Stats: New performance stats are now visible on both the Market Data page and each Manager’s detail page, giving investors a more comprehensive view of track record and risk.
- Single Signature for Joint Accounts: Joint accounts can now be approved and created with a single user’s signature, simplifying account onboarding.
- Investor Roles: You can now designate a financial advisor or third-party as a view-only user on your account. (Reach out to our support team to activate this feature—self-service access is coming soon.)
Coming Soon: We’re preparing for the upcoming launch of Separately Managed Accounts (SMAs)—a personalized investing experience designed for larger portfolios. More details to come in Q3.
Looking Forward: Positioned for What’s Next
As we progress through 2025, our record results validate that Percent’s core principles—short duration, structural protection, diversification, and transparency—deliver value precisely when markets need it most.
By focusing on lending to lenders, we provide diversified exposure across tens of thousands of underlying businesses and consumers while maintaining the flexibility to adapt as risks evolve. In an environment where volatility is becoming the norm, Percent combines data-driven underwriting, short-duration structures, and real-time transparency to navigate change effectively.
With our expanding borrower ecosystem, growing investor base, and enhanced institutional capabilities, we’re well-positioned for continued growth. Thank you for being part of our journey and for helping shape the future of private credit.