Private Credit for Business Acquisitions and Buyouts: A Strategic Financing Alternative for Modern Deals

Business acquisitions and buyouts need a lot of capital, and traditional bank loans don't always work out. Private credit has become a flexible option, letting you secure the funds for acquisitions without having to rely on conventional lenders.

This alternative source has grown fast in recent years as banks have made it harder to borrow.

Private credit providers create customized loan structures that fit your specific deal. These lenders work directly with you to fund leveraged buyouts, management buyouts, and middle-market acquisitions.

The process usually moves faster than traditional bank financing. Terms can be tailored to match your business goals and cash flow needs.

Understanding how private credit works in acquisition financing helps you make better decisions when buying a business. This guide covers the main aspects of private credit for buyouts, from deal structures and eligibility requirements to choosing the right lending partner.

Key Takeaways

• Private credit offers flexible, non-bank financing for business acquisitions when traditional loans aren't a fit.
• You can customize loan terms and structures to match your deal and business cash flow.
• Picking the right private credit partner means looking at their experience, deal criteria, and how quickly they can close.

Understanding Private Credit Structures

Private credit deals usually involve specific loan types, several parties, and detailed agreements that protect everyone involved. The structure you pick will affect your costs, flexibility, and obligations throughout the deal.

Types of Private Credit Instruments

Unitranche loans blend senior and junior debt into one loan with a single interest rate. You deal with just one lender, not a stack of different ones. This makes the structure simpler and helps you close the deal faster.

Senior secured loans sit at the top of your capital structure. Lenders get first claim on your company's assets if you default. You’ll usually pay lower interest rates since lenders take on less risk.

Mezzanine debt fills the gap between senior debt and equity. It comes with higher interest rates and may include equity warrants, letting lenders convert debt into ownership if you miss payments. This can lower the amount of equity you need for an acquisition.

Second lien loans add more capital beyond senior debt. Lenders have a secondary claim on your collateral, so you’ll pay higher rates than senior debt but lower than mezzanine.

Key Stakeholders in Private Credit Deals

Private credit funds act as your direct lenders. These non-bank groups include specialized funds, business development companies, and the credit arms of private equity firms. They make lending decisions a lot faster than banks.

Private equity sponsors often team up with private credit lenders to finance buyouts. They put up the equity while credit funds provide the debt.

Your management team is key during negotiations. Lenders look closely at your ability to execute the business plan and pay back the debt.

Legal and financial advisors handle the deal terms, due diligence, and documentation for everyone involved.

Typical Terms and Covenants

Financial covenants require you to meet certain ratios, like debt-to-EBITDA, interest coverage, and minimum liquidity. You’ll need to report these numbers quarterly or annually.

Negative covenants limit certain actions unless the lender approves. You might face restrictions on taking on more debt, selling assets, paying dividends, or making big capital expenditures.

Reporting requirements mean you must provide regular financial statements, compliance certificates, and business updates. Most lenders want monthly reports and annual audited statements.

Pricing terms include interest rates (fixed or floating), origination fees, and penalties for early repayment. Many private credit loans have a cash interest part plus payment-in-kind interest that adds to your loan balance.

Benefits of Private Credit in Acquisition Financing

Private credit brings some real advantages over traditional bank financing when you’re buying or taking over a business. The big three: faster deal execution with flexible terms, custom loan structures that fit your transaction, and the chance to keep your ownership stake.

Speed and Flexibility of Transactions

Private credit lenders can close deals in just 2-4 weeks, while banks often take 8-12 weeks. That speed gives you a real edge when other buyers are circling the same company.

Private credit funds have much simpler approval processes. They don’t need the endless committee reviews and regulatory checks banks do. Sometimes it’s just one decision-maker or a small team calling the shots.

Private credit also works with complex deal structures. You can get financing for add-ons, management buyouts, or leveraged buyouts without having to fit into a bank’s rigid box. These lenders know not every acquisition fits a template.

The flexibility even extends to collateral. Private lenders will look at your company’s cash flow and growth potential, not just hard assets. That really matters if you’re buying a service or tech business that doesn’t have a ton of physical collateral.

Customization of Loan Agreements

Private credit lenders build loan terms around what you actually need for your acquisition. You can negotiate covenants that match your business plan, not just accept whatever a bank offers.

Common customization options include:

• Payment schedules that fit your cash flow cycles
• Seasonal payment tweaks for businesses with ups and downs
• Growth capital built into the agreement from the start
• Interest-only periods while you integrate the acquisition

You’ll work directly with your lender to structure the debt. That means you can ask for changes to leverage ratios, reporting, and maintenance covenants. Banks almost never give you this kind of personalization.

Private credit can also mix different debt types in one facility. You might get senior debt, mezzanine, and PIK (payment-in-kind) features in a single unitranche loan. It’s a lot simpler than juggling multiple lenders.

Reduced Dilution for Equity Holders

Private credit lets you fund acquisitions without giving up equity. You keep full ownership and control of your business.

This is a big deal if your company is growing quickly. Giving up 20-30% equity to a financial partner could cost you millions down the road. Debt financing lets you hang onto that upside for yourself and your current shareholders.

You can often get leverage up to 6-7x EBITDA with private credit. That high leverage means you need less equity for the same deal size. For example, a $10 million acquisition might only need $2-3 million in equity, compared to $5-6 million with a traditional bank.

Private credit also means you avoid the governance changes that come with equity investors. You won’t have to add new board members or feel pressured to exit the business on someone else’s timeline.

Eligibility and Deal Criteria

Private credit lenders look at specific business characteristics, financial performance, and risk factors. Knowing these criteria helps you put together a stronger financing package and improves your chances of approval.

Business Size and Industry Considerations

Most private credit lenders focus on businesses with annual revenues between $5 million and $100 million. This middle-market range is big enough to support debt payments but still too small for traditional institutional financing.

Your company usually needs EBITDA of at least $2 million to qualify for real acquisition financing.

Industry matters a lot. Lenders like businesses with recurring revenue, established customers, and predictable cash flow. Healthcare, software, manufacturing, and business services usually get better terms.

You’ll get more scrutiny if you’re in retail, restaurants, or other high-failure-rate industries.

Lenders avoid companies that depend on just one customer, contract, or supplier. If one customer is more than 25% of your revenue, you’ll probably need to show how you plan to diversify.

Creditworthiness and Cash Flow Requirements

Your business needs steady cash flow to cover debt service, with some margin for safety. Lenders look for a debt service coverage ratio (DSCR) of at least 1.25x to 1.5x. That means your cash flow should beat debt payments by 25% to 50%.

Key financial metrics lenders check:

• EBITDA margins above 10-15%
• Revenue growth or stability for at least 2-3 years
• Good working capital management
• Current debt obligations

Personal guarantees are common for smaller deals under $10 million. Lenders will check your personal credit score and net worth too. They like to see FICO scores above 680 and enough liquidity to cover 6-12 months of payments.

Due Diligence and Risk Assessment

Private credit lenders dig deep into your business operations, financials, and market position. You’ll need to provide three years of statements, tax returns, customer contracts, and operational data.

The process usually takes 4-8 weeks.

Quality of earnings (QoE) reports check your financial performance and highlight risks. Lenders often hire third-party firms to analyze revenue, expenses, and working capital. They’ll look closely at EBITDA add-backs and question anything unusual.

Legal and operational risks get a lot of attention. Environmental issues, lawsuits, regulatory problems, and key employee dependencies can all affect your approval. You need clean records, up-to-date contracts, and solid IP protection.

Lenders may ask for more collateral or higher rates if they spot major risks during diligence.

Deal Sourcing and Transaction Process

Private credit lenders find deals through building relationships and market monitoring. They structure loan terms based on risk and collateral. The process goes from initial outreach through negotiation to closing, with ongoing oversight.

Pipeline Development and Origination

You start by building relationships across different channels. Investment banks, business brokers, and M&A advisors often bring opportunities before they hit the wider market.

It’s smart to connect directly with private equity firms that regularly need financing for acquisitions.

Many lenders have sector-focused teams targeting specific industries. This helps you understand business models and spot deals faster. You’ll want to keep an eye on companies in your target markets and look for ownership changes or growth hints.

Key sourcing channels:

• Direct outreach to business owners and management
• Partnerships with intermediaries and advisors
• Referrals from portfolio companies
• Market research and proprietary deal hunting
• Relationships with private equity firms

Technology platforms now help manage deal flow more efficiently. These systems track conversations, store financials, and flag matches for your criteria.

You really need a systematic way to review deals quickly, since competition is fierce.

Negotiating Loan Terms

Negotiation focuses on pricing, structure, and protective covenants. The interest rate reflects the borrower’s risk, usually between 9% and 15% for middle-market buyouts.

You’ll also negotiate an origination fee, often 1% to 3% of the loan.

The loan structure depends on the acquisition. Senior secured loans get first dibs on assets and have lower rates. Unitranche loans blend senior and subordinated debt into one facility. You might also add equity warrants for some upside.

Financial covenants protect your investment. These include maximum leverage, minimum interest coverage, and limits on taking on more debt.

Regular reporting and approval rights for major business changes are pretty standard.

Closing and Post-Closing Steps

The closing process usually takes anywhere from 45 to 90 days, starting from the term sheet to actual funding. You'll dig into the target company's financials, operations, and legal matters—it's a deep dive, not a quick scan.

Your legal team gets busy drafting loan documents like the credit agreement, security agreements, and intercreditor agreements if you have multiple lenders on board. Before funding, you need to perfect your security interest in all collateral.

That means filing UCC statements and locking down control agreements for deposit accounts. The borrower has to tick off all conditions precedent, which usually means putting in minimum equity and meeting insurance requirements.

After closing, you keep tabs on the borrower's performance using quarterly financials and compliance certificates. Site visits and management meetings give you a real sense of how things are going on the ground.

Role of Private Credit in Management Buyouts

Management buyouts lean heavily on private credit to fill the gap between what managers can actually invest and the total purchase price of the business. Private lenders step in with tailored financing, letting management teams take the reins from current shareholders and keep running the show.

Leveraged Buyouts: Mechanisms and Strategies

Private credit usually covers about 60-70% of the deal value when you go for a management buyout. The rest comes from your equity contribution and maybe some outside investors.

Private credit lenders structure these deals with a mix of senior debt and subordinated debt. Here's how it often breaks down:

• Senior debt: First lien on assets, generally 3-4x EBITDA
• Subordinated debt: Second lien, usually 1-2x EBITDA
• Equity contribution: Management puts in 20-30% of the price

You'll notice private credit lenders offer more flexible covenants than banks. They can tweak repayment schedules to fit your company's cash flow, which is honestly a relief when you're focused on growth.

Private credit also moves fast. You can often close in 4-6 weeks, compared to the 3-4 months banks might take.

Alignment of Interests Between Lenders and Management

Private credit lenders tend to act as long-term partners, not just money sources. They win when your business grows, so their incentives line up with yours.

A lot of private credit firms take equity warrants or participation rights alongside their loans. That's good for you—they're motivated to help with your operations and strategic moves.

Your lender will usually assign a relationship manager who really gets your industry and business. This person can become a sounding board and might even connect you to customers or acquisition targets.

Unlike banks, which seem to swap out relationship managers every year, private credit firms usually keep the same contact throughout your loan.

Mitigating Execution Risks in MBOs

You face a bunch of risks when you buy out your company, but private credit lenders help smooth things out. Financing certainty is a big deal here.

Private credit commitments come with fewer strings attached than bank loans, so you're less likely to have a deal fall apart at the last minute. Private lenders do their due diligence upfront, looking at your management team, financials, and market before putting money on the table.

This approach makes the closing process less unpredictable. You'll probably appreciate the confidentiality, too.

Private credit deals usually involve just one or two lenders, which keeps things tight and reduces the risk of leaks to competitors. Fewer people see your sensitive info, and the approval process is way less complicated.

Valuation and Structuring Considerations

Private credit deals require a careful look at company value and thoughtful loan structuring to protect everyone involved. The way lenders size debt and write agreements can make or break a deal.

Determining Enterprise Value

Private credit lenders use a few different methods to figure out how much they're willing to lend. The go-to is usually EBITDA multiples—comparing your target to similar recent deals.

Lenders look over three to five years of financial statements to nail down a normalized EBITDA. They'll adjust for things like one-time expenses, above-market owner pay, or weird revenue bumps.

This way, they get a truer sense of ongoing cash flow. Some typical adjustments:

• Non-recurring professional fees
• Excess owner compensation
• Related party transactions
• Discontinued product lines

Your industry makes a big difference. Software companies might see 8-12x EBITDA multiples, while manufacturing is more like 4-6x. Private credit lenders tend to use conservative numbers—they want to be sure the assets cover the loan if things go sideways.

Debt Sizing and Leverage Ratios

Lenders figure out your max loan amount with leverage ratios, basically measuring debt against earnings. Most private credit providers offer 2.0x to 4.0x total debt-to-EBITDA for middle-market buyouts.

Some common metrics:

• Senior debt: 2.0-3.0x EBITDA
• Total debt: 3.0-4.5x EBITDA
• Interest coverage: At least 2.0x (EBITDA/Interest Expense)
• Fixed charge coverage: At least 1.2x

If your business has recurring revenue, long contracts, and strong margins, you can get higher leverage. If it's cyclical or relies on a handful of customers, lenders will be more cautious.

They'll also check debt service coverage ratios to make sure you generate enough cash to pay back the loan. Lenders want to see EBITDA covering payments by at least 1.2 to 1.5 times.

Intercreditor Agreements

Intercreditor agreements set the rules when more than one lender is involved. They spell out who gets paid first if things go south.

Senior lenders get top priority over junior and mezzanine lenders. The agreement covers payment waterfalls, voting rights, and what actions each lender can take if there's a problem.

Senior lenders usually control the first steps if there's a default, while junior lenders have to wait out standstill periods—often 90 to 180 days.

These agreements also lay out lien priorities. Senior lenders get first dibs on assets like equipment, inventory, and receivables; juniors are second in line or even unsecured.

Key terms to look for:

• Payment subordination
• Standstill periods (90-180 days)
• What actions are allowed
• Rules for amending the agreement

Clear intercreditor terms help you avoid messy lender disputes, so you can focus on running your company.

Regulatory and Legal Factors

Private credit deals face more regulatory scrutiny these days, both in the U.S. and Europe. Authorities are especially interested in liquidity, disclosure standards, and valuation practices.

Your compliance obligations depend a lot on where you operate, and big shifts in the economy can bring new rules that affect your deal.

Compliance and Disclosure Obligations

You need to meet specific disclosure requirements when using private credit for acquisitions. Regulators are watching how you value portfolio companies and communicate risks to investors, and the SEC has ramped up enforcement.

Your lender will ask for detailed financial reporting during the loan term. Expect to provide updates on cash flow, covenants, and any major business changes.

Many private credit agreements go further than banks in what they require. Key disclosure areas:

• Financial metrics and forecasts
• Major changes in operations
• Covenant compliance certificates
• Use of loan proceeds
• Related party transactions

There's also more oversight of investment advisers in private credit funds. Recent lawsuits have focused on inadequate disclosures about fees, conflicts of interest, and risks in leveraged deals.

Jurisdictional Variations

The legal framework for private credit varies a lot depending on where you're doing business. U.S. deals are usually less restrictive than European ones, but both are tightening up.

You need to know which regulators have authority over your deal, based on your company's and lender's locations. Licensing requirements can differ—some places make private credit funds register as financial institutions or get lending licenses.

If you're doing cross-border deals, you might have to comply with multiple sets of rules. Different countries handle security interests, bankruptcy, and creditor rights in their own ways.

These differences affect your loan documents, enforcement, and how much you can recover if things go wrong. It's smart to work with legal counsel who knows the ins and outs of each jurisdiction.

Impact of Macroeconomic Conditions

Rising interest rates push up your borrowing costs in private credit deals. Most facilities use floating rates tied to SOFR or similar benchmarks, so payments go up as rates do.

Regulators often react to economic swings by tightening capital requirements for lenders. In downturns, they look harder at leverage levels.

If your debt-to-EBITDA ratios are high during uncertain times, expect more questions. Lenders also get more cautious when macro indicators look shaky, which can shrink available loan sizes and raise costs.

Inflation can make it harder to meet covenants. Higher input costs squeeze margins and cut into cash flow, so it's worth negotiating for some covenant wiggle room in case the economy throws you a curveball.

Emerging Trends in Private Credit Markets

Private credit markets hit $1.7 trillion in assets under management by 2026, driven by banks pulling back and tighter regulatory capital rules. There are three major shifts you should know about if you're eyeing private credit for business acquisitions.

Rise of Direct Lending Platforms

Direct lending platforms now dominate middle-market acquisition financing. You can get capital straight from private credit funds, skipping traditional banks.

This change happened because regulations made it tougher for banks to hold leveraged loans. Platforms offer more flexible terms, and you usually get a firm capital commitment right through closing.

Your deal timeline can shrink by 30-40% compared to bank syndication. Some key perks:

• Higher leverage ratios (often 5-6x EBITDA, compared to 3-4x from banks)
• Fewer covenants or even covenant-lite deals
• One-on-one lender relationships for easier negotiations
• Faster approvals (2-3 weeks instead of 6-8)

Evolution of Deal Structures

Deal structures have gotten more creative as private credit options expanded beyond just senior loans. Now you see hybrid instruments that mix debt and equity.

Asset-backed finance is a bigger part of the mix, letting you pledge specific assets instead of relying only on cash flow. Your financing might include unitranche debt, which combines senior and subordinated tranches into one package.

This setup simplifies your capital stack and cuts down on the number of lenders you have to manage. You can also get "bespoke" structures tailored to your specific deal or industry.

Impact of Technological Innovation

Technology has shaken up how you access and manage private credit. Digital platforms let you compare lenders, apply, and track deals in real time.

You get faster credit decisions thanks to automated underwriting tools that crunch your financials. Valuations are more accurate now with better data systems.

Portfolio monitoring is ongoing, not just quarterly, which gives lenders more confidence and might even mean better terms for you. Private credit funds are using AI-driven analytics to spot risks specific to your business or industry.

Managing Risks and Challenges

Private credit transactions carry distinct risks that require careful attention from borrowers. Understanding default scenarios, market conditions, and loan structures helps you make informed decisions about your acquisition financing.

Default and Recovery Considerations

If you default on a private credit loan, lenders usually have more direct control over the recovery process than traditional banks. Private credit funds often negotiate remedies upfront, like taking operational control or forcing asset sales.

Recovery rates vary a lot depending on your collateral and business fundamentals. Lenders tend to secure their position with first-lien claims on assets, so they get priority in bankruptcy.

Your loan agreement spells out what happens if you miss payments or breach covenants. It’s worth reading those default provisions closely before signing anything.

Common default triggers include:

• Missing interest or principal payments
• Failing to maintain required financial ratios
• Selling major assets without lender approval
• Experiencing material adverse changes in business operations

Private credit lenders often move faster than banks when problems crop up. Sometimes they take action within just 30 days of a covenant breach.

Market Volatility

Private credit loans might have fixed or floating rates, each carrying its own set of risks. If you’ve got a floating rate tied to SOFR or something similar, rising rates mean higher costs.

A 2% rate hike on a $50 million loan adds $1 million in annual interest. That stings.

Your ability to refinance depends a lot on current market conditions. When credit markets tighten up, finding replacement financing at reasonable terms can get tough.

If your business plan hinges on refinancing before maturity, that’s a risk to keep in mind. Market downturns also hit your company valuation and asset values.

Lower valuations might trigger extra equity requirements or even spark early repayment talks with lenders.

Covenant-lite Loans

Covenant-lite structures give you more freedom to run your business. You don’t have to meet strict financial ratios every quarter like with traditional loans.

You’ll face fewer restrictions on dividends, asset sales, and extra borrowing. But here’s the catch—lenders might not notice problems until you actually miss a payment.

By then, your options to negotiate workout terms are limited. Covenant-lite loans usually come with higher interest rates, often 50-100 basis points above traditional loans.

So, you’re paying extra for that flexibility throughout the loan term.

Selecting the Right Private Credit Partner

Picking the right private credit partner really matters. You want someone who gets your business and can move fast when needed.

Key factors to evaluate include:

• Experience in your industry – Find lenders who’ve closed similar deals in your sector
• Speed and flexibility – Private credit lenders should move quicker than banks
• Relationship approach – The best ones focus on long-term relationships, not just single transactions
• Deal structure options – Look for lenders who offer several structures like unitranche, senior debt, or mezzanine debt

Ask potential partners about their track record with companies your size. Middle-market businesses need lenders who specialize in that space, not just big corporate deals.

The terms matter just as much as the money. Watch out for covenant structures, prepayment penalties, and reporting requirements.

Private credit often has fewer restrictions than bank loans, but every lender is different.

Questions to ask during selection:

• How many deals have you closed in the past 12 months?
• What’s your typical timeline from application to funding?
• Do you have experience with add-on acquisitions?
• What leverage multiples do you usually provide?

Your private credit partner will know your financial details inside and out. Choose someone you trust and can talk to openly.

The relationship you build now will shape your future financing and any follow-on acquisitions.

Frequently Asked Questions

Private credit for acquisitions comes with its own quirks. Let’s get into some of the most common questions.

What credit score is typically needed to qualify for a business acquisition loan?

Private credit lenders don’t fixate on personal credit scores like banks do. Your score matters, but it’s rarely a dealbreaker.

Most lenders want to see a minimum personal credit score of 650 to 680. They care more about your business experience, the target company’s cash flow, and the deal structure.

If your score is below 650, you might still get financing if the business is solid and you bring relevant experience. Some lenders approve deals with scores in the 600 to 650 range if other factors look good.

What are the main requirements lenders look for when financing a business acquisition?

Private credit lenders look first at the target company’s cash flow. They want steady EBITDA that easily covers debt service.

You’ll need to put in equity—usually 10% to 30% of the purchase price as a down payment. This shows you’re committed and helps reduce lender risk.

Your industry experience counts for a lot. Lenders want proof you understand the business and can run it well after closing.

The business should have at least two or three years of financial history. Start-ups or companies with limited track records are much harder to finance through private credit.

How do private credit lenders structure financing for acquisitions and buyouts compared with banks?

Private credit lenders usually offer unitranche loans that combine senior and subordinated debt into one package. This means you deal with just one lender instead of juggling multiple layers of debt.

Banks typically provide only senior debt, so you’d need to find a mezzanine lender for extra leverage. That adds complexity and more negotiation.

Private credit lenders might go up to 7x EBITDA in leverage. Banks usually cap it at 3x to 4x EBITDA, so you’d need to raise more equity with a bank.

Covenant structures differ too. Private credit deals often come with covenant-lite terms or fewer maintenance covenants.

That gives you more flexibility after the acquisition.

Is it possible to secure 100% financing for a business acquisition, and what trade-offs are involved?

Getting 100% financing is really rare, but not totally impossible. The trade-offs are pretty steep.

If a lender does offer full financing, expect much higher interest rates. You might pay 15% to 20% annually, instead of the usual 10% to 13% if you put equity in.

Lenders also want more control over your operations. You’ll deal with tighter covenants, cash flow sweeps, and restrictions on key business decisions.

At that point, they’re basically your business partner, not just a lender.

Some lenders use holdco PIK structures, where part of the loan sits at the holding company level. Interest on that portion compounds instead of being paid in cash, so you’ll face a bigger balloon payment later.

What interest rates, fees, and repayment terms are common for acquisition financing in today's market?

Private credit interest rates for acquisitions usually run from 10% to 13% in 2026. Your rate depends on deal size, business risk, and how much leverage you take on.

Most loans have a floating rate tied to SOFR, plus a spread of 7% to 10%. Some lenders offer fixed-rate options, but you’ll probably pay a bit more for that certainty.

Origination fees are typically 2% to 4% of the loan amount. You’ll pay these upfront at closing, so make sure to include them in your total acquisition costs.

Repayment terms usually last five to seven years. You’ll make monthly interest payments, with principal due at maturity, though some lenders offer quarterly principal payments.

Prepayment penalties are common. Expect 3% if you repay in year one, 2% in year two, and 1% in year three. After that, there’s usually no penalty.

How difficult is it to get approved for an acquisition loan, and what factors most influence approval odds?

Getting approved for private credit acquisition financing isn’t exactly easy, but it’s usually a bit more accessible than a traditional bank loan.

Your approval odds hinge on a few factors you can actually influence.

Strong cash flow at the target company helps a ton. Lenders like to see debt service coverage of at least 1.25x—so, EBITDA should cover debt payments with a 25% cushion.

The size of your equity contribution matters, too. If you’re putting down 20% to 30%, your chances look better than if you’re scraping by with just 10%.

Industry experience in the target company’s sector also makes a difference. If you’ve been in the business for five years or more, lenders see you as less risky.

Your financial projections play a role. Lenders prefer realistic forecasts backed by historical performance over wild growth assumptions.

Deal size can change the game. Acquisitions between $2 million and $25 million tend to be the sweet spot for most private credit lenders.

Smaller deals? They’re tougher to finance, mostly because fixed costs eat into lender profits.