Current Middle Market Trends

The National Center for Middle Market Research polled 1,000 companies over the past year. The study asked each company what their revenue growth was each quarter of the past year. The first quarter of 2016 revenue growth is at 6.3%. This level is down from the first quarter of 2015 (7.4%) but is still significantly higher than GDP growth of 1% for the US. As these growth rates show, the middle market continues to be a stalwart of the US economy.

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.

Current Middle Market Trends: Revenue

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