Revenue Still Rising

According to the National Center for the Middle Market Survey, the percentage of middle market businesses reporting revenue increases for the prior 12 months increased to 79% as of the 4th quarter of 2018. This is an increase of 5.33% over the number of businesses that reported revenue increases for the 12 month period ended 4th quarter of 2017. This shows that, despite headline worries of a moderating economy, the vast majority (nearly 80%) of middle market businesses are seeing sustained strength in their top-lines.

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 Still Rising

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