About $100 billion in loans tied to software companies comes due in 2028 and 2029, and lenders are already nervous. Here is what that could mean for vendors.
The Wall Street Journal reports that about $140 billion of risky loans owed by private-equity-backed companies come due in 2028, and $160 billion in 2029. Software makes up about one-third of that, or roughly $100 billion. Private equity firms buy companies using borrowed money. Many of the software deals are now under strain, and the biggest defaults have not happened yet.
From 2023 to 2025, the amount of risky debt due two years out averaged about $60 billion, per PitchBook. Lenders have grown wary of software in particular. Software loans fell from about 95 cents on the dollar at the end of 2025 to about 85 cents this year. Other sectors held near 96 cents. A lower price means buyers expect to lose money on the loan.
The selloff began after Anthropic and OpenAI released new models. Those models let individual users build programs that could, at least in theory, replace services many software companies sell.
Most of this debt dates to 2021, when interest rates were near zero and private equity firms did record deals, including the $11.8 billion McAfee takeover. Many loans ran seven years because buyers planned to sell within that time. A seven-year loan from 2021 comes due in 2028. Morningstar data shows 21% of software loans mature in 2028, compared with 14% across index loans broadly.
Thoma Bravo agreed to hand Medallia to its lenders, wiping out $5.1 billion in equity on a $6.4 billion 2021 take-private. Blackstone, KKR, Apollo and Antares took control. The deal closed on August 3, 2026. Thoma Bravo said it had overestimated the company's growth and paid too much.
Moody's reported that leveraged loan defaults fell to 5% in Q2, the lowest since September 2023. That figure leaves out much of the restructuring. Among 607 US private credit borrowers, defaults were 4% over 12 months to June. The rate rose to 5.8% when certain interest deferrals and maturity extensions were counted.
One tool is PIK, or payment in kind. A company stops paying cash interest and adds it to the loan balance. It avoids default now, but the debt grows. Lenders are pulling back: 13.5% of new private credit loans in Q2 included PIK, down from 25% at the end of 2025.
A heavily indebted vendor may face pressure to change course. Price hikes or ownership changes could follow. Businesses that rely on such vendors can ask a few questions:
Refinancing decisions on these loans get made in 2027. Solera has about $8 billion due in 2028 and 2029, with loans trading between 77 and 93 cents. At symplr, lenders extended maturities to 2030 and 2031 after its owner put in more money. How many companies will default is not yet known.
If a key software vendor carries heavy debt, ask about its stability now, before price hikes or ownership changes arrive.
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