This week's podcast episode attempts to touch on a series of questions that I've been asked particularly frequently over the past 6 months or so related to the state of the debt financing markets for small businesses. To answer some of these questions, I chose to interview two lenders who have a combined 40+ years of experience lending to lower-middle market businesses not just to finance their acquisitions, but also to finance growth initiatives, day-to-day working capital needs, and leveraged recapitalizations, to name a just few. Among other things, in this episode we cover:

- The current state of lower-mid-market credit

- How lenders have changed their views on the following major terms & considerations: The quantum of debt that they offer to fund buyout transactions, covenants, pricing/interest rates, percentage of free cash flow dedicated to debt service, base case model assumptions, and others

- How a first-time SMB buyer should think about how much debt to put on a deal

- How competitive the average lower-mid-market deal is in this market

- How banks think about the inclusion of seller financing in any given buyout transaction

- How borrowers should think about fixed rate v. floating rate debt

- Questions that credit committees are asking now that they weren’t asking 12 months ago

- What actually happens when a borrower trips a covenant

...and many others.

I hope this conversation is helpful in addressing some of the FAQs that you may have about the current state of the debt capital markets.


Link is below, please enjoy!


The Current State of the Debt Capital Markets