The broadest definition of direct lending is all lending executed exclusively between a debtor and a non-bank creditor. This paper uses the term direct lending to refer to an investment manager (i.e., non-bank creditor) lending capital directly to a company (i.e., debtor/borrower). Direct lending transactions typically take place with smaller or middle market borrowers. This lending looks similar to that which occurs with larger companies in the bank loan and high yield markets, with the major difference being that the direct lending loans are bilaterally negotiated transactions and not freely traded. Finally, traditional bank lending (where the bank retains the loan) and direct lending are not mutually exclusive, as many middle market companies utilize both sources of capital financing.