DealLawyers.com Blog

Deloitte recently published its 2026 M&A Trends Survey. Among other things, the survey suggests that the rise of private credit is likely to continue but notes that concerns about default risks are growing, as is the attractiveness of cash financing. Here are some of the key takeaways from the survey’s discussion of deal financing:

– In 2025, the rise of private credit continued. So did a falloff in commercial lending.

– While private credit and nonbank lenders remained at the top of survey respondents’ preferred financing mechanisms in 2025, concerns about default risk are also rising. A record 61 middle-market borrowers received CCC ratings from the Kroll Bond Rating Agency, indicating that those borrowers were “facing severe operational or liquidity challenges.”

– Among survey respondents, the use of private credit decreased by six percentage points from 2024 and tied with another financing option: all-equity deals, which reflects the continued bull equity market that characterized most of 2025.

– In addition, respondents to our 2025 survey indicated that cash is finally beginning to come off the sidelines to a noticeable degree. Cash as a financing option increased seven points, from 33% in 2024 to 40% in 2025. These financing trends support the notion of a broader potential rebound for M&A in the new year.

The survey also says that dealmakers continue to channel their inner Willy Loman and are once again optimistic about the year, although expectations for the amount of growth in M&A transactions are somewhat tempered.  It also discusses the consequences of mixed macroeconomic signals for dealmakers, the potential for growth in small & mid-cap transactions, and the need for dealmakers to remain flexible in their approach as a result of market uncertainty.

– John Jenkins