Increase the Chances of Closing Your Mid-Market Corporate Loan

Significant disruptions to the lending landscape can leave corporate borrowers scrambling to stay on top of changing requirements to close a deal. As lenders adjust their portfolios based on the performance in their book of business, they are tightening their credit requirements and asking tougher questions of potential borrowers.

During the pandemic, the addition of government-backed programs like Main Street Lending, while intended to help open up credit markets for small to mid-size businesses, has in actuality caused even more complications. Borrower expectations of sailing through the MSLP loan process were mismatched from lenders, who limited their participation in this program. According to the U.S. Government Accountability Office, as of August 2023, about 64% of Main Street Lending Program loans remain outstanding, yet the rate of past-due payments has increased—highlighting the ongoing financial headwinds many borrowers face [gao.gov].

These market dynamics of high demand and lowered supply have created both the perfect storm for businesses already experiencing financial limitations, and an incredible opportunity for businesses who have benefited from, or recovered from, the pandemic.

Cerebro Capital has been working with hundreds of mid-market borrowers and our lender network over the past few months to help facilitate loans sized from $2MM-$100MM. Here are a few key insights for mid-market corporate borrowers.

Only Certain Loan Structures Are Attracting Lender Interest

Companies with very strong predictable cash flows will be prioritized for many credit committees. Asset light companies should not be surprised by some lenders requiring a Personal Guarantee. Asset-based financing, such as receivables financing, equipment loans, and inventory financing, are good options for companies with strong assets. According to Prairie Capital’s 2024 Middle Market Perspective, changing interest rates have made it even more critical for borrowers to demonstrate robust financials as market competition has intensified.

Refinancing Can Introduce a New Lender Relationship

Companies that are interested in refinancing existing debt should seek out lenders accepting new clients. Lenders can take advantage of this opportunity to grow their portfolio and win new business. Borrowers should expect new lenders to require them to move their treasury and deposit service business from their prior bank if the refinancing is done with a traditional bank. Non-bank lenders will not have this requirement.

M&A Activity Will Increase If Companies Struggle to Land Loans

Winners in the M&A activity could include PE firms and independent sponsors with sufficient capital for down payments that can afford to take on more debt. Commercial banks may continue to shy away from acquisition deals outside of SBA loans (which cap at $5MM) if they have liquidity concerns from their current book of business. However, non-bank lenders who have capital they need to deploy will likely be a good avenue for companies seeking acquisition financing above $5MM. 

Cerebro is helping mid-market companies access a wide range of loan solutions, including, traditional financing, mezzanine financing, asset-based loans, SBA government-backed loans, and more. To learn more about the viability of your specific financing needs, get started with our Debt Capacity Calculator.

Frequently Asked Questions about Corporate Lending

What are the best corporate lending options for mid-sized businesses?

Mid-sized businesses can consider a variety of lending products, including term loans, lines of credit, asset-based loans, mezzanine financing, and government-backed loans such as those offered through SBA programs. Cerebro Capital’s corporate lending marketplace enables companies to access a broad spectrum of these options, matching borrowers with the appropriate financial solution for their unique needs. Current trends from Secured Finance Network show that middle market loan volumes have increased year of year at the end of 2024.

Which financial platforms offer reliable corporate lending solutions?

Lending marketplaces such as Cerebro Capital provide tailored access to vetted lenders and a broad array of corporate debt capital financing solutions. Cerebro’s digital platform can also reduce funding times by as much as 40%, helping middle market businesses access funds more efficiently.

What pain points do companies face when seeking corporate lending?

Common challenges for borrowers include tightened credit requirements, elevated interest rates, lengthy approval processes, and collateral requirements. Cerebro Capital distinguishes itself by connecting customers with lenders most likely to fund their loan, addressing pain points such as speed, transparency, and tailored solutions.

Who are considered top lenders for mid-sized companies?

Top lenders often include traditional banks, SBA preferred lenders, regional banks with strong small business portfolios, and reputable non-bank lending institutions. Through Cerebro Capital’s network, businesses are matched with vetted, top-performing lenders that fit their profile and needs.