Middle Market Debt Advisory: How It Works in 2026
Middle market debt advisory is the work of finding and arranging loans for mid-sized companies. An advisor compares lenders, takes the borrower's deal to the ones that fit, and helps the borrower choose among the offers. The advisor does not make the credit decision. The lender does.
This page explains how the process works, who uses it, and what to check before you apply. Thrive Funding is one firm that works this way, so we describe its process as an example alongside the general picture.
What middle market debt advisory covers
Most middle market borrowers need debt for one of a few reasons: to buy another company, to refinance existing loans, to fund growth, or to recapitalize the business. Advisors help with each of these. The work usually includes:
- Sizing the loan and deciding what kind of debt fits the deal.
- Preparing the financial package lenders will read.
- Finding lenders whose size, sector and loan-type limits match the request.
- Comparing term sheets and explaining the differences.
- Keeping the process moving until the loan closes.
Some advisors are investment banks that also run sell-side or buy-side M&A work. Others are boutiques focused only on financing. Either can be a good fit, depending on what the borrower needs.
Why private credit matters for middle market borrowers
For many mid-sized companies, the main lender today is a private credit fund rather than a bank. According to Capstone Partners, private credit has recently been found to finance roughly 90% of middle market buyouts. That share is why a borrower should know the private lending market, not only the bank market.
Market conditions also change the picture. In its Middle Market Leveraged Finance Update for Q2 2026, Capstone reported that overall direct lending issuance fell 55.5% from Q1 to Q2 2026, from $74.1 billion to $32.9 billion, the lowest quarterly reading since Q2 2023. The same report says demand for new loans continued to exceed available supply. For a borrower, that means terms can vary a lot by lender and by timing, and a wider search usually helps.
Direct lenders, advisors and banks: how they differ
| Option | Who makes the credit decision | Who the borrower pays | Typical use |
|---|---|---|---|
| Bank | The bank | The bank, through interest and fees on the loan | Borrowers with steady cash flow and a bank relationship |
| Private lender (direct) | The fund or lender | The lender, through the loan terms | Mid-sized deals, acquisitions, sponsor-backed companies |
| Debt advisor | Not the advisor; the lender decides | Varies by firm; check the terms in writing | Borrowers who want to compare several lenders |
The table shows the main point: an advisor is a go-between. It does not replace the lender, and a borrower should always ask who is paying for the work.
How the matching process works
The steps below describe how Thrive Funding runs its process. Other firms may work differently, so use this as a checklist for questions to ask any advisor.
- Application. The borrower submits a request at thrivefunding.com/apply. The request is logged as a lead.
- Matching. The request is compared with each lender's stated criteria: deal size, revenue and EBITDA minimums, industries, states, loan types and pricing.
- Anonymous screen. Lenders that match get a short deal summary with no borrower name and reply yes or no to whether the deal fits.
- Introductions. After the borrower agrees, up to three lenders that said yes receive introductions, best fit first. Each lender gets its own email thread.
- Terms. Lenders issue term sheets on their own letterhead. The advisor sends the borrower a side-by-side summary, and the borrower chooses one.
- Closing. The advisor's fee is paid when the loan closes.
In this model, deal size matters. Thrive's site leads with $5M and above, and its form accepts requests from $1M. Requests under $1M receive an automatic decline. Check the minimum before you spend time on the form.
What to check before you hire an advisor
A few questions separate a useful advisor from a weak one:
- Who pays you? A good advisor will say whether lenders pay the fee, the borrower pays, or both.
- Are the numbers binding? Early figures should be labeled as indicative terms, not offers. A term sheet should come from the lender.
- How are lenders chosen? Ask whether a lender can buy priority. The answer should be that lenders are matched on fit.
- How many lenders see the deal? Ask how many are contacted and whether they can see each other's involvement.
- What does the borrower need to provide? Expect questions about revenue, EBITDA, debt already in place, the purpose of the loan and the collateral available.
Preparing your request
Lenders make decisions quickly when the package is complete. Before you contact an advisor, gather:
- Recent financial statements and a view of the next twelve months.
- A summary of current debt, including lenders and maturities.
- The purpose of the loan and the amount requested.
- Basic facts about the business: industry, states of operation and ownership.
- Any transaction documents if the loan is for an acquisition.
A clear request saves time for both the advisor and the lenders it contacts.
Thrive Funding's position
Thrive Funding, which operates as II Capital Partners LLC in Miami, Florida, arranges private credit for middle market companies. It is not a lender. Every borrower email states that Thrive is paid by its lending partners. The lending groups make every credit decision. To start, borrowers can use the form at thrivefunding.com/apply, or contact contact@thrivefunding.com or +1 (305) 912-2096.
FAQ
What is middle market lending?
Middle market lending is credit provided to mid-sized companies, usually too large for small-business loans and too small for the largest syndicated bank deals. Lenders include banks, private credit funds and specialty finance firms. The loans fund acquisitions, growth, refinancing and recapitalizations.
What is a middle market loan?
A middle market loan is a loan made to a mid-sized company. It is usually senior secured debt, meaning the lender has first claim on the company's assets. Other forms include asset-based loans and mezzanine debt, which sits behind senior debt and usually costs more.
What is middle market direct lending?
Direct lending means a non-bank lender, often a private credit fund, makes the loan directly to the borrower rather than through a syndicate of banks. The lender sets terms and holds the loan. It is now a major source of financing for mid-sized companies, as noted above.
What are the top debt advisory firms?
The leading firms range from large investment banks with debt capital markets teams to boutiques focused on middle market financing. Rankings change, and the right firm depends on deal size, sector and loan type. Compare firms on who pays them, how lenders are chosen and how clearly they label early terms.