What Is a Middle Market?

Helen Akers
Helen Akers
Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

A middle market is a conglomerate of medium-sized companies. Specific brokerage firms and lenders typically serve middle markets. Medium-sized companies usually employ up to 100 people and typically have assets at or below a certain monetary amount. These types of companies may be beginning to stabilize in terms of growth or may be looking to expand their operations further.

The economy contains several different types of companies. Small and emerging markets are considered to be made up of start-up companies, privately owned "mom and pop" businesses, and companies that may only have one or two locations within the same geographical area. In contrast, a middle market will contain companies that have been established for some time, but may not operate on a large national or global scale.

Middle market companies will typically have a central location or headquarters. They may have several other offices or work centers that are spread throughout the region or country in different cities. Companies of this nature are usually focused on one or two specific lines of business. For example, a medium-sized outsourcing company that specializes in customer service in the telecommunications industry might have two ordering process centers located in one area and two work centers that handle inbound phone calls.

During periods of economic recession, a middle market may experience less of an impact than segments that are comprised of smaller or larger companies. This resilience may have several causes. Medium-sized companies may be able to deliver a better value than a larger, well-known firm that needs to charge higher prices due to the prestige associated with its brand name. They also have an advantage over smaller companies that have not yet built enough recognition and trust in their respective markets.

Companies in the middle market might have economies of scale advantages over both larger and smaller companies. Their costs may be lower than larger firms and at the same time they will have more resources than a start-up firm. The production and delivery of their goods and services might in fact produce a higher per unit profit.

There are specific lenders that cater to the middle market. They are willing to take on some of the risks associated with companies that might want to grow but are attempting to do so in highly competitive industries. Medium-sized companies may not have established processes that are the most efficient or results-oriented. Some of these companies also may not be able to yet recruit and maintain the best human capital, as their compensation and benefit packages are not as comprehensive as larger corporations.

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