Every month, we will feature an active member of the ACG New York community in a brief interview. Reflecting industry insight and personal perspective, this feature will introduce industry leaders and offer advice on the tools you need to succeed in the ever-changing middle market.
1. Quick basics– role/firm/focus/how long have you been an ACG member?
I am currently a Director of Originations for White Oak Commercial Finance (“WOCF”) providing companies with non-bank asset based, senior secured revolving lines of credit from $5-40MM+, including internationally, with advances against a borrowing base formula, underwriting capabilities up to $150MM in partnership with our other White Oak affiliates.
WOCF is flat organization with a streamlined approval process with the ability to fund large transactions as a one-stop solution for borrowers with various financing needs up and down the capital structure. Borrower needs range from turnarounds, recapitalizations, restructurings, rapid growth, seasonality, fallen angels, highly levered, etc., within manufacturing, distribution, wholesale, retail, business services, staffing, food & beverage, apparel, plastics, injection moldings, metals, oilfield services and several other industries.
I have been a member of ACG since 2013.
2. What do you think are the biggest obstacles in the middle market today?
As a lender, the biggest challenges in the middle market are centered around the vast amounts of liquidity that continue to flood the marketplace and the ripple effects impacting M&A. With the abundance of dry powder sitting on the sidelines within the PE community as fundraising soars to new heights, coupled with the influx of money entering the debt markets through the increasing emergence of private credit funds, the competitive landscape to acquire platform companies as well as provide the credit facilities to fund the acquisitions remain at all-time highs.
3. How has ACG helped you in your career?
ACG has been instrumental in broadening my network of finance professionals centered within the middle market M&A world and has deepened my understanding of its ecosystem. My involvement as chair of the Volunteer and Lenders committees has helped to expand my reach to ACG NY’s 1,100+ members while cultivating leadership skills that have translated directly towards furthering my professional career.
4. Can you tell us about your greatest success story/ proudest achievement?
In general, I get a great sense of accomplishment in assisting middle market businesses reach their long-term goals, whether it be facilitating acquisition financing for a complimentary add on to a portfolio company or providing a refinancing/recapitalization that creates additional liquidity and/or structural enhancements to a company’s capital structure.
More specifically, I was involved with providing a refinancing of a revolving credit facility to a company that has had recent liquidity struggles. We were able to step in to creatively provide structural enhancements to the company’s credit facility to free up much needed additional cash flow, closing the facility, which included vast complexities amongst multiple borrowing entities, in less than 45 days from signing a proposal.
5. What changes do you foresee happening in the middle market in the next 3-5 years?
We’ve been involved in the longest economic growth cycle in our US history. Although we’ve been talking about a looming recession for the past several years, the economy has showed resilience and middle market M&A has benefited tremendously during this unprecedented run. With that being said, it is not a matter of if but when a slowdown will occur.
From a lending perspective, you’ve already started to see traditional banks beginning to temper their appetite for booking new loans, with underwriting standards moving more toward the down case scenario and a rising interest rate environment. You’re also starting to see lenders begin to shed underperforming loans versus their willingness to be more patient with borrowers facing difficulties. As tariffs continue to become more impactful to US manufacturers and distributors in addition to the ongoing challenges facing retailers, the availability of credit will probably tighten up over the next 3-5 years with the middle market getting hit the hardest. There will be still be plenty of liquidity available to borrowers but this will likely come from more non-traditional sources of debt such as credit funds and hedge funds who are willing to take on potentially riskier loans, for a premium, versus banks who will be more risk averse as the economy softens.