Middle Market Revenue Growth

According to the National Center for the Middle Market, revenue growth for the middle market segment was 6.1% for the 12 month period ended December 31, 2015. The Center estimates 3.7% revenue growth for the next 12 months for the middle market segment. While still better than most large cap companies, this growth rate is a 39% decrease on a year over year basis, and indicative of decelerating growth ahead in 2016.

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.

Middle Market Revenue Growth

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