Revenue Growth Still Strong & Increasing
According to the Middle Market Institute Q3 2018 survey, 77% of companies surveyed reported revenue increases over the prior year. In the Q3 2017 survey, 70% of companies reported revenue increases over the prior year. This is a positive indicator for companies as they head into 2019. The percentage increase of 10% (7 over 70) shows that growth is broad based and building.

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.

Revenue Growth Still Strong & Increasing

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