The principals of MidMarket Management Group believe that middle-market businesses are transitioning from start-ups that have succeeded by the operating guile of the owner/founder and tightly controlled spending. The continued growth and viability of these businesses are dependent upon the owner’s ability to professionalize their business by building and managing an organization, systems & procedures, and complete and accurate financial reporting and planning.

The unique and varied experiences of MMMG’s personnel can help owners and managers through this most difficult transition, especially when the company has underperformed or found itself in a desperate financial condition. We are experts in accessing the options, identifying cash-generating changes, and quantifying the future performance of the company in a conservative, understandable, and achievable manner.

We further believe that lenders to middle market companies are the single most important financial advisor of their borrowers. The maturation of the lending market, increased bank regulation, and an imbalance of lenders to borrowers has virtually eliminated the “relationship lending” that the banking industry built itself on. In the hottest economy in history, borrowers (both performing and underperforming) became accustomed to levering better deals from their current lenders by getting other banks to offer them improved structures and pricing. Either the incumbent took the restructured deal, or it lost the loan. There is no more “Sarah’s been my lender through thick and thin, I’ll never leave the bank.”

Recent economic events have forced the return of “relationship lending.” These events have damaged the supermajority of middle-market companies, and they will surely have no option to refinance from their current lender, even if the bank wants them to refinance out. The two parties are stuck with each other, and the profitability and viability of the borrowers is a common objective of both parties. A constructive relationship is essential to reach these objectives.

Each lender/borrower relationship must include:
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• Conservative reporting and planning of business performance by the borrower, this should include aggressive implementation of operational changes designed to minimize incremental borrowing requirements.
• A loan officer that has credibility within their organization (the bank or finance company) and an ability to “sell” difficult, required lending structures to the credit committee.
• Trust between the two parties that they are both working toward the common objective, that the borrower intends to repay his debts and that the lender plans to help the borrower reach that objective.
• Certainly, constructive disagreements will arrive, making the shared objectives essential.

MMMG is prepared to support both sides of this relationship.

When the relationship is a success and economies have returned to normal, MMMG is prepared to help both parties find the best deal for the owner of the business (sale, acquisition, recapitalization). We hope that the restored relationship will keep the lender in the sale transaction with a new buyer or be the lead lender on any acquisition or refinance.