A middle market firm is defined as a company that has revenues generally between $50 million and $1 billion. Middle market companies create about 40 percent of Gross Domestic Product and employ about 40 percent of America’s workforce. The 200,000 plus US-based mid-market companies are essential to America’s success. These companies account for around $10 trillion annually and 30 million jobs, according to the NASDAQ. Due to its large share of the market, it is often referred to as the backbone of the economy and a lifeline to economic recovery.
During the previous recession, the middle market continued to thrive when larger companies were struggling. Middle market companies tend to hire more domestic workers than any other firm, which helps to generate a strong economic multiplier effect. The companies within the middle market are geographically diverse and span every industry from retail to manufacturing. Another interesting fact about the middle market is that only 20 percent of the companies within this range of revenue are publicly traded. Private-equity firms or families own the vast majority of middle market companies.
A distinctive element of middle market companies is there propensity for fast growth. They have higher upside than larger companies with far lower downside than smaller companies. The majority of middle market companies reported healthy year over year growth in 2015. There are myriad financing solution for these types of businesses including mezzanine finance, asset-based loans, unitranche debt, senior cash flow debt, and growth-equity. Middle market companies can use these different financing options for growth, M&A purposes, buyouts, and refinancing. If your company falls into the middle market, it is beneficial to find an advisor who can help you make the best financial decisions for the future of your company.