The strategic mandate for middle market specialty finance

By: Bob McCarrick, Head of Corporate Bank, Capital One

Despite warnings about economic headwinds from business leaders over the past few years, the middle market has been an incredible source of economic growth in the United States. According to the National Center for the Middle Market, these companies have maintained strong momentum since late 2021, averaging double-digit year-over-year growth in both revenue and employment. 

As of mid-2025, revenue growth remains robust at 10.7%, well above the historical average of 7.5%, while employment growth continues to outperform long-term trends at 7.3%.

The middle market spans more than 50 different subsectors–each with its own cycles and challenges–and commercial banks likewise serve these companies in a myriad of ways to help them achieve their goals. Specialty lending can be one of the most important tools for middle market businesses to maintain double digit revenue growth, particularly in complex sectors with regulatory components or volatile patterns. The more complex an industry the company competes in, the more critical it is to work with a specialty lender. 

Specialty lenders—especially those with a long track record in an industry—offer value that extends far beyond tailored capital solutions.They become true partners by providing deep industry perspectives, facilitating introductions to their vast network of management talent and complementary companies and offering invaluable insights into specific subsector trends. Thanks to their experience, they can provide a broad, balanced perspective that middle market companies, intensely focused on more immediate goals, have difficulty achieving. They can help put current challenges that may loom large into a longer context. Specialty lenders are also incredibly valuable because they are grounded in current knowledge and best practices but also keep an eye firmly focused on the future to make sure their clients stay ahead of the competition.

For example, recent research from Capital One shows that 66% of middle market businesses plan to invest in AI over the next year, with leaders expecting it to deliver the highest ROI. Specialty lenders who understand these priorities can help companies align financing strategies with innovation goals. They also have the range of products that companies in that segment require to thrive at every stage of their lifecycle, whether they are early-stage growth companies or publicly traded companies. 

For example, products for medical device manufacturers and healthcare services providers may include solutions for leveraged buyouts, recapitalizations, bolt-on acquisitions and growth capital. For purchasers of medical office buildings or senior living communities, the specialty lender must be able to offer a different set of solutions, ones that might combine shorter-term balance sheet lending with longer-term agency lending.

For middle market companies in highly complex industries, time is always in short supply. Specialty lenders don’t have to be brought up to speed on industry issues or trends. They are already there, bringing to the table a comprehensive understanding of the risks and complexities faced by those companies. 

This familiarity cuts time on the front end, and it means transactions may close faster. Specialized industry knowledge translates into high certainty of execution and may lead to a compressed timetable for underwriting. When competition is fierce, the ability to finance a transaction quickly can significantly improve business outcomes. 

Every middle market company should work with a banker who fundamentally understands their business and with whom they feel comfortable embarking on a long-term relationship. In that way, choosing a banker is much like choosing a physician. People take children to pediatricians because of their knowledge of childhood development, as well as shared values and communication styles. The same holds true for middle market companies. Engaging a specialty lender–and ensuring the right chemistry–is one of the best ways to make sure your company stays healthy and continues to grow and flourish. 

Middle market companies remain a powerful engine of growth, and sustaining that momentum requires more than capital—it demands expertise, speed, and a true partnership. With money on the line, working with a specialty lender is one of the most important decisions a business can make to drive future growth. By aligning with a partner who understands their industry and offers tailored solutions, companies can navigate complexity and position themselves for long-term success.

 

Learn how specialty finance can help your business navigate complexity and drive long-term success with our Corporate Banking solutions.