Middle Market Revenue Growth

According to the National Center for the Middle Market, revenue growth projections are in positive territory. 56% of all Middle Market companies surveyed in the 2nd quarter of 2016 project positive revenue growth for the next 12 months. This is down slightly from the 60% that projected positive revenue growth in the 2nd quarter of 2015. Despite the downtick, the average company’s revenue grew at 7.2% over the past 12 months. With more than 50% of the companies projecting positive growth, the middle market is in good shape.

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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