Zac Barnett is a Chicago-area attorney and fund finance advisor with extensive experience in commercial lending, private equity, and fund finance transactions. Over nearly two decades in the legal and financial sectors, Zac Barnett has represented lenders and borrowers in a broad range of private equity, hedge fund, debt, and real estate financing matters. He spent 17 years at Mayer Brown, LLP, where he handled complex lending transactions and developed financing structures tailored to client needs. He is also the co-founder of Fund Finance Partners, LLC, a fund finance advisory firm serving private fund sponsors across the United States. Through his work advising clients on subscription credit facilities and fund-level debt structures, he has developed substantial insight into lending markets and the evolving terms available to borrowers in competitive financing environments.
Why Fund Borrowers Are Seeing Better Terms in Today’s Lending Market
Fund borrowers include private fund sponsors and related fund entities seeking subscription and similar fund-level credit facilities. In today’s market, that group can sometimes negotiate better terms because lender competition has increased and pricing has tightened. Better terms can mean lower pricing, but they can also mean a structure that better fits how the fund expects to borrow and operate. That matters because a facility affects liquidity, timing, and post-closing administration.
Recent market conditions support that shift. Pricing has tightened, more market participants are competing in the space, and stronger borrowers may now have more room to compare options. Slower fundraising has also added pressure on lenders to compete for well-prepared transactions. Together, those conditions can improve a sponsor’s negotiating position.
That shift becomes easier to understand in the context of subscription facilities. A subscription credit facility allows a lender to extend credit primarily against investors’ uncalled capital commitments, i.e., capital they have promised to contribute when called. Sponsors often use these facilities to provide liquidity, bridge cash-flow timing gaps, and manage capital calls more efficiently. That structure can also help a fund access capital quickly without issuing an immediate capital call each time a short-term funding need arises.
Because those are practical operating functions, usefulness can matter as much as price. A lower spread does not always result in a better facility if another proposal offers a more suitable structure or better borrowing capacity. Collateral structure can directly affect how much of the facility the fund can actually use, and subscription facilities are more covenant-light than NAV facilities and many traditional leveraged and investment-grade loan products. Those points support looking beyond rate alone.
The lender mix also helps explain why sponsors now have more choices. New entrants, private capital, and nontraditional lenders now participate alongside banks in this market. Some lenders compete through flexibility and customized solutions, while banks often bring experience, familiarity with processes, and broader service relationships. For borrowers, that broader mix can mean a wider range of structures.
Even in a favorable market, sponsors do not benefit automatically. Lenders still underwrite investor commitments, collateral rights, governing documents, and facility structure with care. Capital call rights, enforceability, and investor evaluation all affect lender comfort. A sponsor that presents a clear financing plan and well-organized materials provides lenders with a cleaner underwriting process.
Facility purpose also matters. Funds may seek financing to provide liquidity, add flexibility, bridge timing gaps, or smooth administration. When a sponsor knows which of those objectives matters most, it becomes easier to judge whether a proposed facility actually fits the fund. That kind of clarity helps a sponsor assess the offer before the parties finalize documents.
A financing advisor can add value during that stage. Advisory work may include approaching different lender groups, obtaining and comparing term sheets, streamlining execution, and simplifying compliance after closing. Those services do not replace legal review, but they can help keep the process orderly and make lender comparisons more useful. They can also help a sponsor test how each proposal fits the fund model before the parties commit to a final structure.
A competitive lending market helps most when a sponsor decides early what the facility needs to do after closing. A line meant to cover short timing gaps should not be structured for recurring operational use. Sponsors who define that purpose before negotiations begin are better positioned to choose terms they can manage in practice, rather than work around avoidable constraints later.
About Zac Barnett
Zac Barnett is a Chicago-area attorney and fund finance debt advisor with experience in commercial lending, private equity, and fund finance transactions. He is the co-founder of Fund Finance Partners, LLC and previously spent 17 years at Mayer Brown, LLP representing lenders and borrowers in complex financing matters. Mr. Barnett has closed hundreds of lending deals involving billions in loan commitments and has written extensively on fund finance topics and regulatory developments. He earned his law degree from Northwestern University School of Law.
