In Q2 2022, amongst an unstable global economic and political environment, Josh Cohen, President of Controlled—predicts a substantial uptick in lower middle market activity, as many small businesses begin to suffer from the credit crisis that resulted from the economic easement in the United States over the past 2 years.
“We recognize the difficulty in predicting what will happen tomorrow, especially as we rise out of a global pandemic, amongst an administration change within our Nation, and conflict amongst Global Leaders,” says Cohen. “The unfortunate reality of the SBA’s easement programs that occurred in 2020 and 2021 are now surfacing, as many companies sustained or grew with the support of the United States Government as a capital source.”
“We already see the early stages of an economic correction unfold. In small businesses and lower-middle markets – this means businesses that are overleveraged by daily or weekly MCA payments (“Merchant Cash Advance”) are now seeking alternative capital in the form of selling equity or issuing convertible debt.”
Cohen sees this as a positive and believes that if a company can get over the hurdle of expensive financing solutions like MCAs, while building a scalable and efficient operating model, the business will ultimately prosper long term, especially if it can attract the right investors.
“This isn’t so much about staying afloat, as many businesses have strengthened or grown over the past 24 months. As businesses continue to operate and grow, their access to strategically aligned and longer-term capital partners gets distracted by a myriad of extremely expensive and often unavoidable financing solutions. With the right advisor, however, they can breakthrough that market quickly, and reach the right debt and equity investors,” says Cohen.
“As one of the leading boutique private equity advisory firms in the market, we take pride in providing the most expansive institutional and private lender and investor networks to our clients, providing the fastest and most efficient capital solutions in the market.” Cohen added, “We’re here to help, and while not every scenario is right for us, we’re at least here to point you in the right direction.”
For more information, visit www.controlledcap.com. With media inquiries, please contact Public & Investor Relations, Controlled Development Partners: (412) 559-1559 or info@controlleddev.com
ABOUT CONTROLLED:
Controlled, established in 2017, is a Global Private Equity Advisory Firm headquartered in New York, NY. To date, Controlled Development Partners has advised on over $550.0M in executed debt and private equity transactions.
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