Software Debt Faces Increased Defaults Amid Market Downturn
A growing portion of private software debt is nearing default, signaling broader financial strain before AI's impact became a major concern.
Business & Markets • 3 months ago
The market for private software debt is experiencing a significant downturn, with a notable increase in loans facing potential default. In 2025, the share of private software debt that has declined more than 20% has surpassed levels seen in the preceding five years.
This trend indicates a rough patch for the software lending sector, with concerns mounting even before the anticipated effects of artificial intelligence on the SaaS (Software as a Service) market, sometimes referred to as the 'SaaS-pocalypse', became a dominant factor. The data suggests underlying vulnerabilities within the sector that predate the recent AI-driven anxieties.