Most public information on private credit focuses on pricing. The structural terms — personal guaranty, warrants, PIK, fees, amortization, term length, fixed vs. floating — are harder to find and matter at least as much for the borrower's economics and risk.

 

This page documents the prevalence and shape of those terms across priced loan terms issued through the Cerebro DirectConnect marketplace from Q2 2018 through Q2 2026. Findings are updated annually as new loan terms accumulate.

 

How to read the percentages in this document. Unless explicitly labeled otherwise, every percentage in this Atlas describes the probability that a given term appears at all in a loan of that type — not the size, magnitude, or coverage of that term. For example, "45% PG" on ABL Equipment means there is a 45% probability the loan will include a personal guaranty requirement; it does not mean the personal guaranty covers 45% of the loan amount. Where a percentage describes the size of a term rather than its probability (e.g., median warrant coverage as a share of equity), it is labeled with "size" or "magnitude" explicitly.

 

Personal guaranty

Personal guaranty (PG) is the single most variable structural term in the dataset, ranging from near-universal in some loan types to functionally absent in others.

 

Overall prevalence. A personal guaranty is required on 57% of all middle-market loan terms in the dataset — meaning roughly 57 out of every 100 loans in the marketplace include a PG requirement of some kind.

 

By loan type — probability a personal guaranty will be required

Loan type	Probability PG required
SBA 7(a) — Non-Real Estate	100%
SBA 7(a) — Real Estate	100%
SBA 504 — Senior	100%
SBA 504 — Debenture	100%
USDA B&I — Real Estate	100%
USDA B&I — Working Capital	100%
USDA B&I — Equipment	100%
Factoring	82.4%
ABL Working Capital — A/R Only	72.3%
Commercial Real Estate — Senior	71.9%
ABL Working Capital — A/R & Inventory	52.3%
ABL Equipment — Machinery	45.0%
Senior Cash Flow	41.1%
ABL Equipment — Rolling Stock	36.4%
Bridge Loan	5.3%
Recurring Revenue	0.0%

Reading the table. All government-guaranteed loan programs — SBA 7(a), SBA 504, and USDA B&I — require personal guaranty from any owner with 20% or more equity in the borrowing entity. PG is effectively universal on these facilities; there are no practical exceptions for the typical small-business borrower. Factoring and A/R-only ABL also skew heavily toward PG because the lender's collateral position is operationally dependent on the borrower's continued cooperation. At the other end, recurring-revenue and bridge facilities are typically issued to sponsor-backed borrowers where PG is structurally inappropriate or unavailable.

 

By lender type — probability a personal guaranty will be required

Lender type	Probability PG required
Commercial Bank	76.9%
Non-Bank	46.0%

The 31-percentage-point gap is substantially explained by loan-mix effects (banks issue more SBA paper) but persists within most loan types. Banks ask for personal guaranty more often than non-banks even on comparable structures.

 

By borrower size — probability a personal guaranty will be required

TTM revenue	Probability PG required
Under $5M	79.2%
$5M – $10M	71.1%
$10M – $25M	54.5%
$25M – $50M	48.6%
$50M+	38.6%

PG probability drops monotonically with borrower size. Above $50M of TTM revenue, fewer than four in ten loan terms require PG; below $5M, nearly four in five do.

 

Warrants

Warrants involve two distinct percentages that should not be confused:

1. The probability the lender will request warrants at all (the focus of the table below).
2. The size of the warrant coverage when warrants are requested — i.e., what fraction of the borrower's fully-diluted equity the lender is asking for.

Probability warrants will be requested (overall). Warrants are requested on 4.7% of middle-market loan terms — meaning roughly 1 in 20 loans in the marketplace includes any warrant component at all.

Size of warrant coverage when warrants are requested. When warrants are present, the median coverage is 5.0% of fully-diluted equity (mean 6.04%). This is the size of the warrant, not the probability of getting one.

 

Probability warrants will be requested, by loan type

The conventional wisdom that warrants are common in private credit is wrong outside of a narrow set of structures. Warrant requests are concentrated in three product categories:

 

Loan type	Probability warrants requested
Junior Cash Flow	38.9%
Recurring Revenue	32.3%
Senior Cash Flow	15.6%
Bridge Loan	2.6%
All ABL structures	<0.5%
All SBA structures	0.0%

If a borrower is being asked for warrants on a senior-secured ABL facility, that is materially out of pattern.

 

PIK (Payment-in-Kind Interest)

Like warrants, PIK has two distinct percentages:

1. The probability that any PIK component will be present in the loan structure.
2. The PIK rate itself — the annualized rate at which interest accrues in kind rather than in cash — when PIK is present.

Probability PIK will be included (overall). PIK is included on 2.2% of loan terms — meaning roughly 1 in 45 loans in the marketplace has any PIK component.

 

PIK rate when PIK is included. When PIK is present, the median PIK rate is 2.00% per annum (mean 4.10%). This is the rate at which the PIK accrues, not the probability of having PIK in the first place.

 

Probability PIK will be included, by loan type

PIK is concentrated almost entirely in cash-flow lending:

 

Loan type	Probability PIK included
Junior Cash Flow	44.4%
Senior Cash Flow	7.1%
All ABL structures	<0.5%
All SBA structures	0.0%
Commercial Real Estate — Senior	0.0%
Bridge Loan	0.0%

Origination fees

Like warrants and PIK, fees have two distinct percentages:

1. The probability that any origination or commitment fee will be charged.
2. The size of the fee, expressed as a percentage of the facility amount, when a fee is charged.

Probability a fee will be charged (overall). An origination or commitment fee is charged on 86% of loan terms — meaning roughly 6 out of every 7 loans include some fee.

 

Fee size when a fee is charged (overall). When a fee is charged, the median fee is 2.32% of the facility amount.

Probability of fee and fee size, by loan type

Loan type	Probability a fee is charged	Median fee size when charged
ABL Working Capital — A/R Only	96.2%	3.00%
ABL Working Capital — A/R & Inventory	94.9%	2.45%
Bridge Loan	92.1%	2.00%
SBA 7(a) — Non-Real Estate	90.9%	3.21%
SBA 7(a) — Real Estate	89.3%	2.76%
Senior Cash Flow	89.3%	2.00%
Recurring Revenue	83.9%	2.25%
Factoring	82.4%	1.75%
Commercial Real Estate — Senior	68.8%	1.50%
ABL Equipment — Machinery	51.1%	2.00%

Fee sizes cluster in a tight band of 2.0–3.0% across most structures when charged. Equipment-secured facilities are the only major category where fees are absent more often than present, reflecting their hybrid lease/loan economics.

 

Term length

Median term length by loan type:

 

Loan type	Median	IQR
Factoring	1.0 yr	1.0 – 2.0
Bridge Loan	1.0 yr	1.0 – 1.3
ABL Working Capital — A/R Only	2.0 yr	1.4 – 3.0
ABL Working Capital — A/R & Inventory	2.0 yr	2.0 – 3.0
ABL Equipment — Machinery	3.0 yr	3.0 – 4.0
Recurring Revenue	3.5 yr	3.0 – 4.0
ABL Equipment — Rolling Stock	4.0 yr	4.0 – 4.8
Commercial Real Estate — Senior	5.0 yr	2.0 – 5.0
Senior Cash Flow	5.0 yr	3.0 – 5.0
SBA 7(a) — Non-Real Estate	10.0 yr	10.0 – 10.0
SBA 7(a) — Real Estate	17.0 yr	10.0 – 25.0

Working-capital facilities cluster at 2 years; cash-flow term loans at 5; SBA at 10–25 reflecting the program's amortization schedules. The implication for refinancing waves: roughly 60% of the active loan-term base reprices within three years.

 

Fixed vs. floating rate

The percentages below describe the probability that the loan will have a floating rate (rather than a fixed rate). They do not describe the size of any rate.

 

Loan type	Probability the loan is floating-rate
ABL Working Capital — A/R & Inventory	98.1%
SBA 7(a) — Real Estate	96.4%
ABL Working Capital — A/R Only	96.2%
SBA 7(a) — Non-Real Estate	94.7%
Commercial Real Estate — Senior	75.0%
Senior Cash Flow	68.7%
Factoring	58.8%
Recurring Revenue	35.5%
ABL Equipment — Machinery	27.2%
ABL Equipment — Rolling Stock	4.5%
Bridge Loan	0.0%

Working-capital and SBA paper is overwhelmingly floating-rate. Equipment-secured and recurring-revenue facilities are predominantly fixed. This split has practical consequences: a borrower whose debt stack is heavy in equipment financing has materially less rate sensitivity than a same-size borrower running on revolvers.

 

What to expect when reading a term sheet

A consolidated reference table for the most common structures. All percentages in the PG, Warrants, and PIK columns describe the probability that the term will appear in the loan, not the size of that term.

 

Structure	Typical rate	Typical term	PG probability	Warrants probability	PIK probability	Floating-rate probability
ABL — A/R & Inventory	~9.75%	2 yr	~52%	<0.5%	<0.5%	Almost always (98%)
ABL — A/R Only	~9.75%	2 yr	72%	<0.5%	<0.5%	Almost always (96%)
ABL — Equipment / Machinery	~15.75%	3 yr	45%	<0.5%	<0.5%	Rarely (27%, mostly fixed)
Senior Cash Flow	~10.00%	5 yr	41%	16%	7%	Mostly (69%)
SBA 7(a) — Non-RE	~9.75%	10 yr	100% (program rule)	0%	0%	Almost always (95%)
Commercial Real Estate — Senior	~8.92%	5 yr	72%	0%	0%	Mostly (75%)
Factoring	~10.00%	1 yr	82%	0%	0%	~59%
Recurring Revenue	~14.62%	3.5 yr	0%	32%	0%	Mostly fixed (36% float)
Bridge Loan	varies	1 yr	5%	3%	0%	Never (fixed)

Rates shown are medians from 2022 – Q2 2026 and should be read alongside the Cerebro Private Credit Pricing Index for current quarterly figures.

 

Methodology

Source. All findings are computed from priced loan terms issued through the Cerebro DirectConnect marketplace, Q2 2018 through Q2 2026. Loan terms are observed at issuance — these are real, priced offers from lenders to borrowers, not survey responses or self-reports.

 

Coverage. The dataset spans 27 loan types and 11 facility types, issued by 35% commercial bank lenders and 65% non-bank lenders.

 

Statistical methodology. Loan-type-level cuts are reported only where the cell meets minimum-sample requirements for stable estimates. Lender-type, revenue-band, and structural-probability cuts use the full available sample. PIK and warrant probability figures use the full sample because they describe a categorical "present/absent" outcome that does not require continuous-variable sample sizes to be stable.

 

Definitions and how to read the percentages

A note on terminology. Throughout this document, "probability" or "probability the term appears" refers to the likelihood that a given structural feature will be included in the loan structure at all. Where a percentage describes the size of a term (e.g., the size of a warrant as a fraction of equity, or the size of a fee as a fraction of the facility), it is labeled separately.

 

Personal guaranty (PG) probability: The probability that a loan of the given type will include any personal guaranty requirement, unconditional or limited, from one or more borrower principals. Limited and full guaranties are aggregated. For government-guaranteed loan programs (SBA 7(a), SBA 504, USDA B&I), PG probability is stated at the program-rule level (100%) rather than observed frequency, because these programs require PG from any 20%+ owner with no practical exceptions for typical small-business borrowers; observed gaps in the data reflect intake-recording inconsistencies, not real program exceptions.

 

• Warrants — probability vs. size: "Probability warrants requested" is the fraction of loans of a given type that include any warrant component. "Warrant coverage" (a separately labeled metric) is the size of those warrants when present, expressed as a percentage of fully-diluted equity. These are different concepts and should not be confused.

• PIK — probability vs. rate: "Probability PIK included" is the fraction of loans that include any PIK component. "PIK rate" is the annualized rate at which interest accrues in kind when PIK is present.

• Origination fee — probability vs. size: "Probability a fee is charged" is the fraction of loans of a given type that include any origination or commitment fee. "Fee size when charged" is the median fee expressed as a percentage of the facility amount, computed only over loans with non-zero stated fees.

• Floating-rate probability: The probability that a loan of the given type is structured with a floating rate (indexed to Prime, SOFR, Treasury, or LIBOR-vintage) rather than a fixed rate.

Update cadence. Annually. Structural prevalence shifts slowly enough that quarterly updates would mostly reflect sampling noise; pricing is updated quarterly in the Pricing Index.

 

Citation

Cerebro Capital. The Cerebro Structure & Covenant Atlas, 2026 Edition. May 2026. Underlying data: Cerebro DirectConnect marketplace, Q2 2018 – Q2 2026.

 

For access to the underlying dataset, including borrower financial pairings and facility-level collateral detail, contact Cerebro Capital for Data Licensing.