With green shoots in the economy bringing deals out of hibernation, challenges in other markets providing opportunity and a willingness among stakeholders to look at different debt structures, 2024 is already bringing an air of optimism in the mid-market for banks and financial institutions. Against a backdrop of macro and geopolitical volatility, a few key trends are likely to shape UK mid-market debt finance in the coming months.
As businesses have tried to avoid (now costly) bank debt, solutions to plug funding gaps have included an increase in the use of equity and loan notes for acquisitions, wholesale “payment in kind” facilities, multiple lenders on transactions that would not have warranted it in the past, direct lending from debt funds alongside private equity and making use of PIK toggle provisions to free up cash.
