Top 5 Middle Market Business Challenges in Securing Funding

Posted on: July 13th, 2016

When looking to get a loan, it is common to run into some problems. Here are the top 5:

Finding the right lender: Depending on your type of business and the amount you are looking for, not every lender will be right for you. Find out who is, and target them as a potential lender.

Having a plan: When investing money, lenders like to know how the money will be spent and how it will be paid back. Make sure you have it all detailed out.
The team behind you: It is essential to have a strong team behind you so that your plan can be carried out to its fullest. Ensure you have a full team and the best players at each position.
Presentation is key: You may have a great plan but it means nothing if it’s not communicated properly to investors. Professionalize your presentation and communicate it with authority.
Perseverance: If something doesn’t work out, do not be discouraged. There are many opportunities out there, so examine the process, learn from your mistakes and commit to the journey of success.

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.