The repeal of the Glass-Steagall Act in 1999 set off a wave of consolidation between traditional “money-center” banks and “pure-play” investment banks in the early 2000’s. As a result, a small group of large global banks emerged and focused their lending activities and investment banking services almost exclusively on their largest corporate, institutional, and private equity clients. In addition, significant new banking regulations and capital constraints were implemented in the aftermath of the global financial crisis in 2008-09, which ultimately resulted in more conservative lending standards and a general reduction of bank capital available for companies (esp. in the middle market).

Due to bank consolidation and regulatory changes, many “non-bank lenders” (e.g. BDC’s, private debt funds, distressed/special situations funds, etc.) emerged to fill this lending void for middle market companies. And over the last 5+ years, there has been a massive increase in the number of these non-bank lenders and the amount of capital they have available. With 500+ regional/local banks and non-bank lenders currently active in the market, the middle market lending landscape has now become extremely fragmented and difficult to navigate, even for seasoned finance professionals.

Today, the large money-center banks are principally focused on large corporate and private equity clients generating larger loans (approx. $250 million and up), which can be syndicated to institutional investors. For a middle market company needing to borrow $25 million to $250 million, the fragmentation and number of lenders now competing has made it very difficult to efficiently access this market. Each of these lenders have unique lending criteria, capabilities, industry focus, product offerings, and return requirements, which make it very challenging and time-consuming for companies and PE firms to access the appropriate lender and structure for their capital needs.

Netrex was founded to provide independent debt and capital arranging services to middle market companies and PE firms and help them navigate an increasingly fragmented lending market. As a “conflict-free” advisor, our singular goal is to help our clients effectively and efficiently manage the capital-raising process from start to finish. We advise our clients on the appropriate structures, terms, and lenders for their transaction, and we generally achieve this by running a highly competitive “financing process”. Through this process, we access our network of over 350 lender relationships to solicit a group of the most aggressive and appropriate lenders for each specific transaction. We believe this results in our clients achieving the most optimal financial outcome with the “right” lender and best rate for their company’s financing needs.