Matt Plooster returns to the podcast to deliver a timely update on private credit and specifically its deployment in the lower middle market. 

Despite lingering gaps in awareness and education among business owners and professional advisors, the overall picture is bullish on private credit’s continued growth and deployment. The bearish private credit headlines in the WSJ and Bloomberg aren’t representative of lower middle market activity. AI and private credit in software have undergone a full re-rating. Software no longer gets its own software-centric ARR oriented underwriting framework.  It’s back to cash flow and EBITDA.  

Matt and Peter examine how non-dilutive capital is being used to solve shareholder liquidity issues, fund growth, and support acquisition strategies for Main Street businesses. They also cover the current bifurcation in the private credit market, why software underwriting has shifted materially in the AI era, and why industrial and infrastructure-related sectors continue attracting significant private credit dollars. 

The conversation closes with a broader discussion that is closer to home for Matt regarding AI’s impact on the investment banking industry, the deal process, and how it’s impacting investment banking hiring and diligence processes. Again, listeners will hear some surprising answers that fly in the face of the mainstream media’s generally gloomy AI narrative.   

Discussion Points:

Masters in Small Business M&A (sign up for podcast drops here) is produced by its host Peter Lehrman and the team at Axial (www.axial.com). Axial makes it easy for small business owners to confidentially explore growth capital and exit transactions with top-ranked lower middle market M&A advisors and professional capital partners. In every episode, we explore the dynamic world of small business M&A, interviewing a mix of proven and emerging owners, operators, acquirers, and M&A advisors whose strategies and methods are being put to the test.

If you’d like to go deeper, head to Axial.com, where we make available the Axial member directories, downloadable tools for dealmakers, the Axial quarterly lower middle market investment banking league-table rankings, the SMB M&A pipeline report, and other useful information. If you’re a business owner, professional acquirer, or M&A advisor, you can start using Axial for free at Axial.com.

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