Middle market firms are important drivers of economic growth, accounting for about one-third of private sector employment in the United States. These companies often face unique challenges, such as access to capital, that can impede their growth. However, these firms have also been shown to be more resilient than large corporations during economic downturns. As a result, they play a vital role in creating jobs and fostering economic stability.
While middle market companies are an essential part of the economy, they often receive less attention than their larger counterparts. This is due in part to their size—mid-sized firms make up a relatively small percentage of all businesses. In addition, middle market companies are often overshadowed by the flashy success stories of startups and mega-corporations. However, it is important to remember that middle market firms are the backbone of the economy, and their continued success is essential for sustained economic growth.
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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: The Corporate Middle Market Seeks Digital Transformation
How to Define the Middle Market:
- American Express – between $1M-300M in revenue.
- Mastercard defines the lower middle as between $10M-100M, the middle as between $101M-250M, and the upper middle as between $251M-1B in revenue.
- National Center for the Middle Market – betwen $10M-1B in revenue.
- Visa – between $10M-$1B in revenue.
- The U.S. Government Small Business Administration defines in varying ways depending on NAICS code.
- The U.S. Department of Commerce defines as having a pre-tax income of between $5M-250M.
- Private Equity Firms – between $25M-750M in revenue.
About Viewpoint
The vast middle market differs in many ways from its large corporate and small business counterparts, but one thing that remains constant is the need for adaptation to new digital systems and operating methods. Fintechs are migrating into this space and financial institutions are figuring out ways to properly collaborate and service this important industry segment.