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Abstract: Non-bank lending to small- and medium-sized firms--i.e., private credit--has exploded over the past two decades. This lending is relatively unregulated and often involves less profitable borrowers, leading many to be concerned that it poses risks to the financial system. But how risky is it? To explore this question, we focus on Business Development Companies (BDCs), which comprise a large fraction of the total private debt market and for which we can observe detailed information on portfolio investments. Although many have noted that BDC investments substitute for bank financing in the wake of post-crisis credit tightening, BDCs operate in meaningfully different ways from traditional lenders. BDCs do not merely make alternative bank loans: they offer a complex combination of securities to companies, spanning the debt/equity spectrum. This allows private lenders to tailor contracts to the risk profiles of individual firms. This contractual complexity is associated with higher interest rates at the loan level but lower betas and higher equity valuations at the BDC-level, which in turn suggests that BDCs' use this richer contracting environment to insulate their investors from the risks inherent in lending to firms that do not meet standard bank lending requirements.