Insights

Acquisition leverage has recovered to roughly where it stood at the 2021 peak. On platform deals the senior layer has not, and the gap was filled by junior capital, which is not the pool most buyers approach first.

A term loan is sized once and never changes. A committed facility against recurring revenue is sized as a multiple of monthly revenue, and availability rises as that revenue rises, without a second underwriting.

Advance rate is the number every borrower asks about and the last one applied. Before it touches anything, the ineligibles come out, and on a $6 million receivables ledger they can remove $2.2 million without a single invoice being bad.

Customers moved from net 30 to net 60, which tied up an extra $1.08 million. The consequence shows up on the other side of the business, where $162,000 of supplier discounts go unclaimed every year because the cash is not there.

July set an all-time monthly record in equipment finance, and the coverage credited AI capital expenditure. Small-ticket volume set its own record in the same month, up 84.5 percent, and that is the segment mid-market borrowers actually borrow in.

Two facilities quoted 75 basis points apart. Once field exams, appraisals, collateral monitoring and the finance team's own hours are counted, the cheaper-looking one costs 82 basis points more to run. The gap reverses entirely.

A manufacturer finances equipment and receivables while its largest asset sits untouched, carried at a depreciated book value that hides what it is worth. Two routes convert it to cash, and only one of them is a loan.

A buyer models an acquisition as price minus debt equals equity. Then the working capital true-up lands, and the seasonal build after it. The cash required is the same whichever month the deal closes, and the acquisition facility funds none of it.