It is continually noted by leaders  in government and the finance communities, that middle market companies represent critical opportunities for job creation and economic growth and could be the key to turning around the struggling US economy. However, business owners in the middle market — especially manufacturers — still report restricted access to capital, which is key to their ability to grow.  Also considered an vital component in growth, is the ability for debt restructuring.  If businesses in this mid segment are expected to continue to expand and create employment opportunities, the availability of alternative sources of commercial funding is necessary to support this growth. Companies who provide these services are experiencing high demand as businesses struggle to clear the obstacles on their balance sheets and take advantage of growth opportunities.

At a recent summit on American competitiveness, top policy and business leaders examined both potential opportunities and obstacles to growth .

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Source: excerpted from abfjournal.com, February 14, 2012

The discussion was based on research findings from the largest-ever study of the U.S. middle market, which highlighted the resiliency of these companies in spite of enduring challenges. This segment, those with revenues between $10 million and $1 billion, encompass some 41 million jobs, 34% of total private employment and generate over $9 trillion in combined revenues annually-making them critical to America’s competitiveness and future.

“Middle-market companies represent critical opportunities for job creation and economic growth,” said Tom Quindlen, president and CEO of GE Capital, Corporate Finance. “As policymakers consider new initiatives to put Americans back to work and to keep our nation on the cutting edge of manufacturing innovation, they must not forget the enduring challenges and significance of middle market companies.”

Manufacturers are the second largest industry concentration of middle-market firms, representing 17.3% of the sector, according to the study. Compared to their peers in other industries, more manufacturers are longer enduring enterprises and have higher levels of employment. “Middle-market manufacturers are currently experiencing a pronounced phase of growth, yet they have real concerns about regulatory compliance and competitiveness that deserve Washington’s attention,” said Anil Makhija, academic director for the National Center for the Middle Market. “They lack a formal advocate and the resources to share their views on the policy agenda. Today’s forum presents a meaningful opportunity to convene a dialogue around how to better support the growth and potential of the middle market.”

While manufacturers in this segment boasted relatively favorable balance sheets and levels of corporate debt, they reported lower access to capital markets and greater pressure from international competition than peers in other industries. Manufacturers in this sector considered lower cost of capital and the ability to restructure debt as key components to their ability to grow.

Several key concerns identified by executives who participated in the study reflect the sentiment of American businesses nationwide, including:

• Cost of regulatory compliance – 75%
• Inflation – 37%
• International competition – 45%