Michelle Handy featured on Cloud 9fin: The case for lower middle market lending

In a recent episode of the Cloud 9fin podcast, Michelle Handy made the case for why lower middle market direct lending is a differentiated pocket of the private credit market. She unpacked the opportunities and obstacles in this space and discussed why asset-based lending is countercyclical to the traditional cash flow market.

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DEFINITIONS

Middle market lending are loans to typically U.S. companies with annual revenues above $100 million and below $3 billion and with more than 100 and less than 2,000 employees.

Private credit or private debt investments are debt-like, non-publicly traded instruments provided by non-bank entities, such as private credit funds or business development companies (BDCs), to fund private businesses.

Direct lending is a form of corporate debt provision in which lenders other than banks make loans to companies without intermediaries such as an investment bank, a broker, or a private equity firm.

EBITDA is earnings before interest, taxes, depreciation, and amortization and may be used as a measure of a company’s health.

Asset-based lending is the business of loaning money in an agreement that is secured by collateral. An asset-based loan is typically secured by inventory, accounts receivable, equipment, or other property owned by the borrower.

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