Insights from MiddleMarch Partners

Banks have increasingly been encouraged by regulators to curtail their lending activities, creating a vacuum that is being filled by non-bank lenders. Reacting to waves of risky loan underperformance, bank regulators have encouraged US banks to limit their lending to their largest, lowest-risk, commercial borrowers. As banks have increasingly pulled back from lending to small and medium-sized enterprises (SMEs), non-bank lenders have stepped in to fill this gap, offering flexible credit options to these underfunded companies.