Platform strength shines through market uncertainty
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Following a strong 2024, Percent continued its accelerated growth trajectory through the first nine months 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.
Q3 2025 had a very strong quarter for issuance volumes with $130.3 million funded (vs. $133.9 million in Q2) across 73 deals (vs. 62 in Q2)—our strongest quarter ever for issuance count. This represents a 49.0% increase in deal count and a 47.7% growth in issuance volume compared to Q3 2024. The surge in activity was largely driven by asset-based securities, which made up 83.6% of all funded deals. Across all transactions funded in Q3 2025, these carried a 16.14% current weighted average coupon with an average investment term of 14.1 months.
On the back of our eight consecutive quarter of growth, our core Assets Under Management (AUM) climbed from $279.9 million by the end of Q2 2025 to $322.9 million as of September 30, 2025, an all-time high and equivalent to a 15.3% quarterly increase, and a remarkable $126.9 million increase year-over-year.
This robust quarterly performance builds on our market-tested foundation, which has now seen 681 deals fully repaid, returning over $1.35 billion in principal and $96.3 million in interest to investors who previously had limited access to this asset class.
Q3 2025 By The Numbers
Note: Net return after losses (charge offs) for Q3 2025 LTM 14.4%; Net returns after losses (charge-offs) and fees (servicing fees) for Q3 2025 LTM of 13.0%.
Asset-based notes were the primary driver of AUM growth in Q3, increasing by $42.4M, while outstanding corporate loans only increased by $0.2M. 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 Q3, four new borrowers debuted on the Percent platform, bringing incremental expertise across sectors to the marketplace:
New Borrowers
- Inside Track ($0.8M across 2 deals): The underlying obligor is a special purpose entity established to produce, complete and deliver a film written and directed by Jevon Whetter inspired by the true story of an all-deaf high school track and field team, led by a deaf coach at the Oregon School for the Deaf. Structured as a senior secured corporate loan.
- Alternative Funding Group ($4.7M across 2 deals): Florida based merchant cash advance originator established in 2016. Structured as a senior asset-based note.
- Alvos ($1.0M across 2 deals): Consumer lending company focused on providing short-term personal loans to underbanked individuals in Mexico. Structured as a senior asset-based note.
- Fiji Funding ($1.2M across 1 deal): New Jersey based merchant cash advance originator established in 2021. Structured as a senior asset-based note.
Additionally, one existing borrower Flow48 brought a new asset-based note program to the platform for a portfolio of loans originated in South Africa.
The majority of these 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.
Investor Marketplace Performance: Consistent Returns during Volatile Markets
In the twelve months ending Q3 2025, investors earned $37.3 million in interest (vs LTM Q2 2025 of $33.8 million), with an average net return of 13.0% 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, sixteen borrowers had active workout situations. Notably, twelve of these sixteen borrowers involve corporate loan structures, while only four 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.
- Expected Charge-Offs: For some select borrowers whose recovery efforts remain more unsatisfactory with low probability of recovery, partial or full charge-offs will be assessed and conducted in Q4 2025
- 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
Global financial markets delivered strong gains in the third quarter of 2025, supported by continued demand for artificial intelligence (AI) and technology, solid corporate earnings, and a widely expected interest rate cut by the Federal Reserve—with the potential for additional cuts before year-end. The resilience of the U.S. economy remained evident, underpinned by healthy GDP growth, stable consumer spending, and subdued core inflation. A late-September revision confirmed that U.S. GDP grew at an annualized rate of 3.8% in Q2 2025. These positive economic signals bolstered investor confidence heading into Q4 and 2026. However, the onset of a government shutdown on the first day of the fourth quarter introduced a degree of uncertainty.
Government bond markets saw mixed results during the quarter. U.S. Treasury yields declined (as yields move inversely to prices), while yields in the UK, Germany, and Japan rose. In the U.S., the yield curve initially steepened, driven by expectations of further rate cuts and concerns over the Federal Reserve’s independence—raising questions about its long-term credibility in managing inflation. Credit markets had a notably strong quarter. U.S. investment-grade spreads tightened further, outperforming government bonds and reaching some of the narrowest levels seen in decades.
Looking ahead, private credit appears well-positioned for continued expansion, emerging as a core component of diversified investment portfolios. As BlackRock notes in its October 2025 On the Record series, “For investors, adding private credit to a traditional portfolio of equities and public fixed income may help offer a steady income stream, lower volatility, portfolio diversification and a better risk/return profile, with higher returns for less risk.”
Strong investor demand and ample dry powder are expected to sustain origination activity. However, maintaining disciplined underwriting will be essential. As the market evolves, increased segmentation is likely, with managers aiming to differentiate through more specialized and targeted strategies.
Through ongoing innovation we are expanding access to private credit. 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.
Compounding Our Momentum: Key Q3 Initiatives
Our strong performance is powered by strategic growth and a constant drive to improve the investor experience. In Q3, we took significant steps forward, launching new institutional products, enhancing platform capabilities, and earning national recognition for our growth.
Strategic distribution: Pursuit
We announced a joint venture with Pursuit to expand advisor access to lower-middle-market asset-based private credit. The collaboration pairs Percent’s origination and infrastructure with Pursuit’s advisor distribution, creating another channel of committed capital that supports our borrowers and complements marketplace demand.
- Press release: Read the announcement
- Learn more: pursuitfunds.com
Introducing: Separately Managed Accounts
SMAs are now available for qualified investors seeking a discretionary, customized portfolio of private credit notes. Mandates can be tailored by duration, target yield profile, and asset mix, with institutional-grade reporting and service. SMAs are available for investors committing $250,000 or more. To learn more about constructing your custom portfolio, please contact our team. Learn more about SMAs
Product updates: Enhanced Portfolio and Deal Reporting
Our product team rolled out enhancements to our reporting suite. The new portfolio and deal-level reporting pages provide investors with more powerful and intuitive tools to track and analyze performance, cash flows, and underlying deal metrics, reinforcing our commitment to transparency.
Recognition: Percent named to the Inc. 5000
Percent was included on the Inc. 5000 list of America’s fastest-growing private companies, reflecting sustained growth while maintaining a discipline-first approach to underwriting and servicing.
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.