Mercatus Finance

As global markets navigate shifting geopolitical landscapes, the ripple effects of tariffs and trade policies are increasingly impacting private credit transactions—particularly in the non-sponsored middle market. Non-sponsored borrowers, often family-owned or founder-led businesses, rely on private credit to fuel growth, manage working capital, or fund acquisitions. Unlike their private equity-backed counterparts, these companies may have fewer resources to absorb sudden cost increases stemming from tariffs on raw materials or finished goods. For lenders, understanding how tariffs affect a borrower's supply chain, margins, and pricing power is critical. Diligence around customer and supplier concentration, contract structures, and the borrower’s ability to pass through costs becomes even more important in today's environment. Creative structuring—such as incorporating delayed draw facilities or covenant flexibility tied to tariff-driven impacts—can provide borrowers with the agility they need while protecting downside risk. Private credit has always been about more than capital—it's about partnership. In a world where external pressures are mounting, the ability to craft bespoke solutions tailored to a borrower's unique challenges is more valuable than ever. Mercatus Finance is actively deploying capital, offering loans ranging from $20 million to $75 million. www.mercatusfinance.com #PrivateCredit #FinanceTrends2025 #Lenders #LowerMarket #MiddleMarket #DirectLending #DirectLending #SMEFinance #2025 #DebtFinancing #SpecialtyFinance #IndependentSponsor

Private credit can be an excellent financing option for companies, but it’s important to avoid some common mistakes during the process. One of the biggest errors is failing to thoroughly understand the terms of the credit facility. Many businesses focus on the headline interest rate and overlook key details like covenants and repayment schedules, which can lead to cash flow problems later on. At Mercatus Finance, we encourage borrowers to dive deep into the terms and ensure they align with long-term objectives. Another frequent mistake is not being prepared with sufficient financial transparency. Private lenders like Mercatus need to see clear financials, business plans, and projections to assess the risk and structure the right solution. Lastly, some companies fail to consider the long-term relationship with their lender. Private credit often involves ongoing communication and strategic planning, so it’s important to choose a lender who can be a trusted partner, not just a source of capital. By avoiding these missteps, companies can maximize the value of private credit financing. Mercatus Finance is actively deploying capital, offering loans ranging from $15 million to $75 million. ? ? #PrivateCredit #FinanceTrends2025 #Lenders #LowerMarket #MiddleMarket #DirectLending #DirectLending #SMEFinance #2025 #DebtFinancing #SpecialtyFinance

Private credit can be an excellent financing option for companies, but it’s important to avoid some common mistakes during the process. One of the biggest errors is failing to thoroughly understand the terms of the credit facility. Many businesses focus on the headline interest rate and overlook key details like covenants and repayment schedules, which can lead to cash flow problems later on. At Mercatus Finance, we encourage borrowers to dive deep into the terms and ensure they align with long-term objectives. Another frequent mistake is not being prepared with sufficient financial transparency. Private lenders like Mercatus need to see clear financials, business plans, and projections to assess the risk and structure the right solution. Lastly, some companies fail to consider the long-term relationship with their lender. Private credit often involves ongoing communication and strategic planning, so it’s important to choose a lender who can be a trusted partner, not just a source of capital. By avoiding these missteps, companies can maximize the value of private credit financing. Mercatus Finance is actively deploying capital, offering loans ranging from $15 million to $75 million. ? ? #PrivateCredit #FinanceTrends2025 #Lenders #LowerMarket #MiddleMarket #DirectLending #DirectLending #SMEFinance #2025 #DebtFinancing #SpecialtyFinance

Mercatus Finance is heading to ACG Atlanta's M&A South 2025 next week. We're eager to connect with industry leaders, share insights, and explore new opportunities within the lower- and middle-market. Looking forward to reconnecting with valued partners and forging new relationships at this esteemed event. See you there! #MASouth #ACGAtlanta #MiddleMarketDeals #Dealmakers #privatecredit #MercatusFinance

In today's dynamic business environment, partnering with a flexible lender is crucial for companies seeking tailored financial solutions. Private credit lenders, in particular, are well-positioned to offer this adaptability. Here's why: Customized Financing Solutions ? Private credit lenders often provide bespoke financing options, structuring loans to meet the specific needs of borrowers. This customization enables businesses to secure funding that aligns closely with their operational and strategic objectives. Efficient and Streamlined Processes ? Unlike traditional banks, private credit lenders can offer more efficient and flexible lending processes. They can provide tailored solutions that match borrowers' needs, often resulting in quicker decision-making and faster access to capital. Long-Term Collaborative Relationships ? The direct lender-to-borrower structure in private credit fosters long-term, collaborative relationships. This approach allows for ongoing support and adjustments to financing arrangements as business needs evolve, ensuring sustained alignment with company goals. Innovative Deal Structures ? Private credit lenders are adept at creating innovative deal structures, such as payment-in-kind (PIK) loans, which allow companies to defer cash interest payments by issuing additional debt. While these structures can provide short-term relief and support business expansion, they also require careful consideration due to the potential for increased debt burdens. Mercatus Finance is actively deploying capital, offering loans ranging from $20 million to $75 million. www.mercatusfinance.com #PrivateCredit #FinanceTrends2025 #Lenders #LowerMarket #MiddleMarket #DirectLending #DirectLending #SMEFinance #2025 #DebtFinancing #SpecialtyFinance

As we step into 2025, the private credit landscape continues to evolve, driven by economic conditions, regulatory changes, and market dynamics. Here's what to watch for: ? Increased Demand for Borrowers | With banks expected to adopt a more aggressive lending stance in 2025, middle-market businesses will benefit from increased competition from capital providers, prompting private credit lenders to differentiate with customized solutions. Expect more competition for high-quality deals. ? Higher Interest Rates Impact Structures | The sustained high-rate environment will pressure borrowers, requiring creative structuring to balance risk and return. Flexible covenants and innovative repayment terms will be key. ? Data-Driven Decision-Making | The use of advanced analytics and AI in due diligence and credit monitoring is becoming mainstream. This will improve risk assessment and operational efficiency. ? Opportunities in Distressed Markets | Economic uncertainty could lead to an uptick in distressed opportunities. For lenders with expertise in turnaround scenarios, this presents a chance to achieve outsized returns. ? Regulatory Scrutiny Intensifies | Private credit's growth attracts regulators' attention. Staying ahead of compliance requirements will be critical for market participants. As we navigate these shifts, adaptability and creativity will define success. Private credit providers must remain nimble, finding ways to meet borrowers' needs. What trends are you anticipating in 2025? Mercatus Finance is actively deploying capital, offering loans ranging from $20 million to $75 million. www.mercatusfinance.com #PrivateCredit #FinanceTrends2025 #Lenders #LowerMarket #MiddleMarket #DirectLending #DirectLending #SMEFinance #2025 #DebtFinancing

Private credit continues to evolve as a dynamic force in 2024, with several key trends shaping the landscape. Increased volatility in the public markets and tighter bank lending standards have driven more companies to seek out flexible financing solutions from private lenders. This shift highlights the value of private credit in providing customized financing that meets the unique needs of businesses during uncertain economic times. Companies are increasingly turning to private lenders for growth capital, refinancing, and acquisition financing due to the flexibility and speed that traditional banks often cannot offer. For lenders, the opportunities are equally compelling. Direct lending and structured finance are gaining prominence, while competition for high-quality deals is driving innovation in deal structuring and risk management. The strength of private credit lies in its ability to meet the evolving needs of mid-sized companies, offering tailored solutions that traditional banks struggle to provide in today’s complex environment. At Mercatus Finance, we are at the forefront of these trends, leveraging our expertise to drive value for both our clients and investors. Mercatus Finance is actively deploying capital, offering loans ranging from $20 million to $75 million. Learn more at www.mercatusfinance.com #PrivateCredit #DirectLending #DirectLending #SMEFinance

We are pleased to announce that Lowery Thomas has joined the Mercatus Finance team as our new Director of Business Development. With deep expertise in unique lending solutions and capital markets, Lowery brings invaluable experience to the table. Welcome aboard, Lowery – we’re excited to have you on the team!

Mercatus Finance is thrilled to welcome Jared Taylor to our team as an Associate. Jared brings a wealth of knowledge from Wells Fargo, where he supported loan structuring for corporate clients across industries. With a proven track record in credit analysis, underwriting, and portfolio management, Jared is a valuable addition to the firm. Before his career in finance, Jared served in the US Army as an Armor Officer.?