How Commercial Finance Unlocks Growth Opportunities for Mid-Market Businesses
Think “commercial finance” and you may think about large corporations with stellar credit, outsized loans and debt payments that sound like they’d result in just the opposite of growth for any mid-market business.
Think again.
Years ago, conventional thought advocated for running a business entirely without debt. Taking on debt often signaled that a company was in trouble and needed to turn to commercial finance as a last-resort. Even today, mid-market businesses may be reluctant to take on debt.
The reality is that mid-sized companies can use commercial finance solutions very effectively to grow their businesses. Funding can provide the fuel they need to develop and introduce new products and services, expand geographically, cultivate new markets, make strategic acquisitions, achieve sustainability goals or pursue other growth initiatives.
Commercial finance options for mid-market businesses
There are many commercial finance options for mid-sized companies. Here’s a snapshot of just a few, and how mid-market businesses can utilize them for growth capital.
- Asset-based lending (ABL)
With loans secured by assets, ABL can be a cost-effective, smart financing option mid-sized businesses can use to fuel growth. ABL loans often are faster and simpler to obtain than unsecured loans or lines of credit, are flexible and scalable, and often have less covenants than other types of loans. With the ability to increase or decrease with needs, ABL can accommodate business and economic shifts quickly and easily.
- Project and structured finance
Specialized financing programs can provide the capital a mid-market business needs to handle unique projects. Structured loans and leases, finance-forward as-a-service solutions and other programs can help companies innovate, grow and operate more efficiently.
For example, many mid-sized companies use project and structured finance solutions to improve and update their equipment assets. Projects range from the installation of microgrid infrastructure to HVAC upgrades.
- Senior secured cash-flow loans
Designed for middle-market companies needing funding for buyouts, acquisitions and expansions, debt restructuring, refinancing, recapitalizing or to cover capital expenditures (CapEx), private credit senior secured loans offer mid-market businesses a viable way to secure flexible capital.
- Technology channel financing
With up to 100% financing of the service and product supply chain, technology solution providers can invest in the hardware, software and services they need. By removing liquidity constraints, technology channel financing benefits businesses including technology resellers, telecom providers and logistics service providers.
- Trade and supply chain financing
Many mid-market companies utilize these programs to improve working capital with solutions for both sides of the balance sheet. Receivables financing offers a reliable source of working capital for supplier payment, helping to improve supply chain efficiency while freeing up cash for growth initiatives.
Customization
In order for mid-sized businesses to unlock growth opportunities, customized financing programs are essential. Individualized, flexible business finance solutions will help these companies navigate challenging, shifting supply-chain issues and an uncertain economy.
Fluctuating interest rates, inflation, and economies at both the national and international levels have impressed upon businesses the need to move beyond traditional financing, and find solutions that allow them greater flexibility. Working with a financing partner that can offer truly tailored, customized financing programs based on detailed understanding of a company’s industry, market and business model can provide this flexibility.
Mitsubishi HC Capital America is a commercial finance company that provides customized solutions to help businesses of all sizes accelerate growth. Our experts throughout North America work daily with mid-market businesses to help them identify and capitalize on growth opportunities. If you would like to find out more about how commercial finance solutions can help fuel your company’s expansion and growth, contact us.