Middle-Market Companies Turning to Alternative Financing, According to New Survey
A new industry survey is confirming exactly what we’ve been experiencing here at Mitsubishi HC Capital America: the growth in demand for financing beyond traditional bank channels.
As recently reported in The Monitor, a survey conducted by investment bank Carl Marks Advisors found that rising inflation, ongoing labor shortages and a desire to improve capital structures are key factors leading middle-market companies to seek alternative financing options. Survey participants included mid-level executives, founders and owners of middle-market firms with annual revenues of $25-300 million, as well as business advisors, private equity sponsors, traditional lenders and alternative lenders across the United States.
Key findings
- Most (86%) respondents believe banks are applying more pressure to their middle-market borrowers and showing less tolerance when they miss financial targets.
- Almost a quarter (23%) of respondents said alternative, non-bank lenders are providing leverage, flexibility and ease of execution beyond traditional banks.
- More than one in five (22%) respondents said alternative lenders are more flexible and supportive of challenged borrowers.
Robert Lau, partner at Carl Marks Advisors, commented in the article that his firm has seen an increasing variety of alternative lenders stepping in to fill a void in the market and provide more flexibility to companies. “One of the factors driving this is the willingness of alternative lenders to adopt a more relationship-oriented and less transactional approach,” he stated.
Relationship-focused approach
A relationship-based approach to financing has served as the core of success for us at Mitsubishi HC Capital America. We’re far more interested in developing an active working relationship with each customer on an ongoing basis than we are on completing any one transaction.
We’ve found that it works to everyone’s advantage when we take time to learn about every customer’s business, processes and goals. Then, and only then, do we create a financial program specific to their needs. This consultative approach results in flexible, customized solutions and recommendations that directly help customers reach short- and long-term goals.
The survey results attest to what we are doing, and where the financing market is headed. We’re glad to see that businesses, advisors and lenders alike are finding the value in working with a partner and trusted advisor.