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Lending Insights for Mid-Sized Businesses
Market insights into business lending, best practices and unique solutions for working capital, asset-based finance and growth capital.
Insights on Middle Market Lending
Access to the right financing is key to your business’ ability to scale and achieve its goals. As a business leader, it is not enough to make a snap decision and choose the first lending option. Instead, it is crucial to shop around for different loan options.
Securing the right financing can be very challenging for mid-sized businesses. Here at Cerebro, we consistently hear the same three pain points from our customer’s when it comes to securing business loan options: 1) “I don’t have time”, 2) “I need access to top lenders”, 3) “I need business lending experts”.
Seeking capital for your mid-sized business? A crucial first step is to stayed up-to-date with market trends. Not matter what economic conditions look like, Cerebro Capital’s team of experts are closely monitoring the mid-market lending environment.
Consider this scenario: you are a business decision maker in need of loan options for your business. You have just begun the process and the first lender to give you a term sheet is offering rates and terms that appear steeper than you had initially expected. Unfortunately, you have no other loan options under your belt to compare these rates and terms against.
Thinking of acquiring a business? It is crucial to make sure you can secure the right financing for your acquisition target. When you start the acquisition financing process, keep in mind that you will not be able to begin until you have a specific target company identified. Acquisition financing can not be obtained based on a general idea.
Raising capital with assistance from Capital Markets professionals provides many advantages for businesses of all shapes and sizes. Whether you have business financing experience or not, having access to experts will ensure the best lending rates and terms are presented.
Does your business have ongoing efforts to raise capital? If so, it’s essential to be well-informed about the paths you can take to explore debt capital options for your mid-sized business. Each option has distinct characteristics and it is crucial to assess your options before committing to a specific path.
Let’s imagine you are a CEO running a mid-sized business. You understand that securing financing is crucial to your company’s growth and overall financial health. You lack the time it takes to draft a strong company narrative, contact various lenders, access multiple term sheets, and compare loan options.
One day your loan process appears to be in order, the next your commercial lending relationship is ending due to tightening bank standards. Here are some tips for finding an alternative lender.
Five reasons asset-based lending can provide a lifeline for your business, particularly during difficult financial times or during a recession.
Borrowers often use Mezzanine financing to increase their total debt amount or simply to get financing when senior lenders aren’t able to lend.
Business leaders need to be constantly aware of how their company’s financial performance and market shifts affect its debt capacity, which is the best measure of your business’ ability to borrow.
Corporations have been dealing with the same lending problems for over 30 years—spending months on paperwork, questions, and meetings with bankers in an effort to get the funding they needed.
The world of middle-market lending has changed. Before COVID-19, traditional lenders showed flexibility as they worked to expand their books of business.
You’re ready to meet some lenders and get the best term sheets for your business. You can boost your chances of getting better loan terms if you accompany your proposal with a powerful narrative.
Many current and prospective corporate borrowers are looking for real-time information about how bank and non-bank lenders are identifying risks in their deals.
It is important to understand how and why loans fail to close. Armed with this knowledge, you may be able to avoid common mistakes and, hopefully, successfully close a loan with ease.
Significant disruptions to the lending landscape in the past four months have left corporate borrowers scrambling to stay on top of changing requirements
CFOs need to know how their financing options have changed in the wake of incredible economic volatility and government stimulus.
If you have not bid out your corporate credit facilities within the last three years, then you could be missing out on lower interest rates, better structures, looser covenants and more.
The Federal Reserve sets the Federal Funds Rate, which is the interest rate at which banks and credit unions can lend excess reserve balances to other banks and lenders overnight.
M&A activity slowed rapidly in the second and third quarters of 2020, especially among PE firms and independent sponsors, but saw promising signs of improvement in 4Q20.
The first half of 2021 will be a transitional lending environment. Many lenders are still trying to get on a firm footing with their existing customers as government shutdown orders were reinstated in late Q4.
There is increasing interest from deal makers in pursuing mid-market acquisitions. Buyers who are able to get financing are taking advantage of sharply depressed target company valuations.
The pandemic has catapulted companies into uncharted territory. Today, getting a loan in the post-COVID economy can mean navigating a challenging landscape.
Look no farther than the commercial lending market: COVID has most certainly changed the world. When 2020 began, qualified mid-market borrowers could expect competitive loan terms.
Commercial banks are often considered to be similar if not almost identical to one another. The truth is that commercial banks are different because they have different regulators, underwriting standards, and more.
Before engaging with lenders for refinancing or sourcing new credit facilities, developing a thoughtful financial model is one of the most important things you should do as a borrower.
Starting with the basics: a personal guarantee is a commitment from an individual, often the business owner, to guarantee payment on a business loan if the corporate borrower fails to pay.
An inaccurate financial model can cost you reasonable terms on credit facilities as well as other debt financing options. At the very least, an inaccurate model can harm your credibility.
The Dodd-Frank Act rollback, which took place in May 2018, was intended to boost M&A deals among lower-tier banks, such as community and regional banks.
The Federal Reserve created a new loan program to support companies who were in a strong financial position prior to COVID-19 impacts.
Companies looking for up to $5 million in loans might want to consider choosing a lender who offers Small Business Administration (SBA) loans. However, there are many areas to consider for SBA loan structures.
Covenant defaults should be avoided at all costs. The moment a default has occurred, the borrower has effectively given full control over the consequences to the lender.
No member of any finance team wants to explain to their lenders about why they missed a covenant. However, 40% of middle market companies have violated a loan agreement.
Operating leases, which previously were held off balance sheet, will now be required as line items on a company’s balance sheet.
Testimonials
“Having access to Cerebro’s targeted group of lenders has given us confidence that we are getting the best deal in the market.”
Co-Founder
Capital Advisory Services
“Thank you! Without Cerebro it would have taken significantly longer to find the right lender.”
CFO
Manufacturing
“Working with Cerebro gave us more leverage and options than just working with our existing lender.”
COO
Travel Technology Industry
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