Investing in Tomorrow's Growth
Funding the Lower Middle Market
What’s the primary reason that most lower middle market companies fail, according to the small business administration? It’s not lack of sales. Nor is it poor management. Nor is it the ubiquitous ‘bad economy.’ Although those reasons certainly made the list. Give up?
The primary reason why most companies in the lower middle market -- companies with at least $10 million up to about $100 million in revenues -- fail is due to improper capitalization or undercapitalization. Although fast growing, many lower middle market companies lack the ability and capital to fund their growth.
Many companies do have access to capital, but usually it’s in the form of bank debt. Many owners choose to grow their companies to very successful levels, however, fail to take advantage of recapitalization opportunities. In other words, owners need to shore up their capital base with equity.
Unfortunately, lower middle market companies’ access to equity capital has been limited, and therefore it seems their only choice is to over leverage their companies. FHCM provides the access to equity capital so companies have the proper fuel to fund their growth.
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Good luck tomorrow on Fox Business tomorrow
If interested email me at shjb111@tampabay.rr.com
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