Small Biz Optimism Index

According to the NFIB, the March Small Business Optimism index declined slightly from 105.3% in February 2017 to 104.7% in March 2017. The absolute level of the index is still quite bullish, but the level could be flashing the end of the honeymoon period for small business community with the new administration. While one month does not a trend make, it could signal a turning point of reset expectations for the small business community.

In the acquisition financing arena, capital availability is destiny as companies require reliable access to capital to grow over the long term. Unforeseen capital needs usually arise when acquirers least expect it. This can cause some concern for the acquisition financing provider, especially when covenants tighten up and that working capital availability is utilized faster than expected.

Mezzanine debt borrowing is usually a straightforward activity that many companies use for funding of transitional growth. Mezzanine debt lenders are highly transparent about their due diligence approach and their post-closing loan management making it easy for companies to engage with.

Elections have consequences and positive ones at that for the acquisition financing middle market. While much media attention is paid to the direction of the yield curve and the Fed’s likely rate cuts, scant attention is paid to the more important drivers of the acquisition financing market – business psychology and regulatory climate.

Small Business Optimism Index

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