Brother, Can You Spare a Dime? Accessing the Private Markets
The Fed in its latest decision did not move rates, but indicated another hike is probable. Moreover, these elevated rates would likely be in place for longer than people think. As a result, the markets did their thing and tanked.
As rates have shot up over the last 12-18 months, the intended results of a soft landing have not come to fruition. If anything, the US economy has remained resilient and strong relative to the rest of the world. However, these cycles only last so long and there will be a need for refinancing of existing debt or going to market for additional capital.
All that being said, with elevated rates and the prospect of a downturn in the economy, commercial lenders are getting more risk averse. So, what is a business to do? Of late, I am seeing more articles about businesses accessing the private capital markets for debt and equity as the key funds source moving forward.
For privately held businesses, what does this look like and how do they go about accessing these capital providers? Below are a few articles that I think may be of some use:
- The Strategic Secret of Private Equity (hbr.org)
- Private Debt: A Lesser-Known Corner Of Finance Finds The Spotlight | S&P Global (spglobal.com)
- With Business Loans Harder to Get, Private Debt Funds Are Stepping In | Chicago Booth Review
- Why companies might consider the private debt market | EY Luxembourg
Over the next few weeks, I will be diving deeper into private funding options for businesses from the startup stage to those that need growth capital to those that need money just to survive. If economic conditions deteriorate, we may be in a situation where the private markets are the only viable option. Brother, can you spare a dime? (Lets hope that phrase doesn’t come back)
Here are a few other things that may be of interest:
- Data Driven Change Management (eisneramper.com) (10/25 2-3pm EST)
- Workforce Sticky Situations- Prevention Before Investigation (Stambaugh Ness; 9/26; 2-3pm)
As always, please don’t hesitate to email myself (firstname.lastname@example.org), Andy Miller (email@example.com), Christian Miller (firstname.lastname@example.org), Erik Spurlin (email@example.com), Brad Leber (firstname.lastname@example.org) or anyone in our office with questions or comments.