Abstract
Academic research on private debt (PD) has largely emphasized fund-level behaviour, while the characteristics of portfolio companies receiving PD financing remain underexplored. This study addresses this gap by conducting a large-scale empirical analysis of the firm-level determinants in direct lending transactions in Italy. Drawing on a novel dataset that merges over ten million firm-year observations (2013–2023) with proprietary data on PD deals, we examine which types of companies are more likely to access private debt financing. Our multivariate logit analysis shows that PD investors consistently favour larger, moderately profitable, and riskier firms with medium levels of asset tangibility, while avoiding highly collateralized, persistently loss-making, or excessively risky borrowers. These results suggest that PD funds cater to a distinct segment of mid-sized firms underserved by traditional banks, those seeking flexible funding for growth but falling outside conventional lending criteria.