Top 5 Middle Market Business Challenges in Securing Funding

Posted on: July 13th, 2016

When looking to get a loan, it is common to run into some problems. Here are the top 5:

Finding the right lender: Depending on your type of business and the amount you are looking for, not every lender will be right for you. Find out who is, and target them as a potential lender.

Having a plan: When investing money, lenders like to know how the money will be spent and how it will be paid back. Make sure you have it all detailed out.
The team behind you: It is essential to have a strong team behind you so that your plan can be carried out to its fullest. Ensure you have a full team and the best players at each position.
Presentation is key: You may have a great plan but it means nothing if it’s not communicated properly to investors. Professionalize your presentation and communicate it with authority.
Perseverance: If something doesn’t work out, do not be discouraged. There are many opportunities out there, so examine the process, learn from your mistakes and commit to the journey of success.

The deal world thrives on the belief that the institution providing acquisition financing will deliver on their promise. Lenders usually telegraph their capital capabilities early on during the sales pitch and give their deal sizes and hold levels for their fund.

Most mezzanine debt borrowers are rightly focused on the downside of breaking a covenant and for good reason. Most borrowers have had to deal with overly sensitive banks in the past which often exhibit trigger happy default notices during covenant breakages, especially when they want to get out of a loan.

Buried within the pedigreed bios of mezzanine debt lenders and private equity investors lies a secret plainly obvious to any average joe. While mezzanine debt lenders have strong educational and work backgrounds from large elite institutions, they usually lack real world experience of the kind that is valuable to understanding the businesses they seek to evaluate.