According to the NFIB Research Foundation monthly survey, the optimism level of small businesses continues to be strong. The January 2020 monthly reading was 104.3, a full 3.1 points higher than the level of January 2019 of 101.2. This level is also 1.4 points higher than the average monthly optimism index of 102.9 for the entirety of 2019. According to the NFIB, January 2020’s index is in the top 10% of all readings in the 46-year history of the survey. This is a very positive sign that positive animal spirits are afoot in this segment of the economy, as small businesses are a conduit for consumer purchasing and consumer sentiment, in general.

Small Business optimism

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.

Small Business Optimism is Strong

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