How to Start a Private Credit Fund

If you're funding loans one at a time — your own balance sheet, note participations, deal-by-deal investor groups — you may not need a fund yet. A fund makes sense when your origination pipeline reliably outruns the capital you can assemble per deal, when borrowers need certainty of close that a per-deal raise can't give, or when the per-deal administrative load is eating the economics.

The practical test is the same as in every asset class: if you've passed on good loans because the capital wasn't assembled in time, committed capital fixes that. Most first-time credit fund managers arrive with exactly that record — a book of loans they originated and serviced, with default and recovery history LPs can underwrite.

Nearly every US private credit fund uses the same skeleton — typically Delaware entities, wherever the borrowers are.

Almost every first-time credit fund raises under Regulation D. Rule 506(b) prohibits general solicitation but lets you include up to 35 sophisticated non-accredited investors and rely on self-certification of accredited status — the natural fit when your LPs are the same private investors who funded your notes. Rule 506(c) lets you market publicly, but every investor must be accredited and you must verify it with documentation, not a checkbox.

Credit managers skew toward 506(c) more than other asset classes, because yield-focused investors are often reached through content and referral networks rather than a closed circle. Either way you file a Form D with the SEC and state blue-sky notices where your investors live, and the fund typically relies on the Investment Company Act 3(c)(1) exclusion — up to 100 beneficial owners. One credit-specific layer: direct lending can trigger state lending-license and usury rules that vary by state and borrower type, so put the lending-footprint question to counsel early.

The traditional path runs $50,000–$100,000+ in formation legal fees and commonly three to six months of elapsed time. On Fund Launch, the fund formation package — complete formation and offering documents prepared for your fund and reviewed by independent counsel — is $6,000, and managers typically have a complete LP-ready package in days rather than months.

Budget separately for the recurring costs: fund administration (loan-level servicing and interest accruals make credit administration more involved than equity-fund administration), annual tax preparation and K-1s, an audit if your LPA promises one, state filings, and 506(c) accreditation verification if you use it. Because credit funds distribute current income, LPs will study the expense load closely — every point of cost comes straight out of the yield they were promised.

Fund Launch is a fund-building workspace: you describe the strategy, and the platform builds every surface LPs will touch. The Fund Builder models the yield economics — target raise, management fee basis, hurdle, incentive fee, distribution frequency, concentration limits, leverage authority — so your projections hold together under questioning. Scroll Deck turns the fund into an LP-facing pitch deck, Legal Canvas prepares the formation and offering documents for counsel review, and a generated fund site gives your raise a professional front door.

Because every surface is built from the same fund, the net-yield math in your model and the incentive-fee mechanics in your offering documents answer an LP's question identically — which is exactly what diligence is checking for.