In this roundtable, executives share distinct perspectives on how asset-based lending and private credit intersect — revealing strategies that help strong businesses access capital, adapt to challenges, and continue moving forward.

Interest rates remain high, tariffs are muddying planning cycles, and many mid-market companies still carry capital structures built for a very different cost of capital. We asked a roundtable of secured finance leaders for their perspectives on the middle market. Arif Bhalwani, CEO of Third Eye Capital, Brad Kastner, managing director at MidCap Financial, and Aaron Peck, co-head of Alternative Credit Solutions at Monroe Capital each view the landscape through a unique lens. Together, they reveal how asset-based lending and private credit can work together to keep good businesses moving forward.

Where the Market Stands
Mid-size businesses find themselves caught in several major challenges and economic shifts that are difficult to resolve through traditional financial solutions. Many operate under levels of debt that made sense before 2022, but greatly hinder their ability to grow and adapt in a higher rate environment.

Meanwhile, regulatory constraints and the risk-averse nature of banks mean that middle-market businesses struggle to find solutions from institutions that shy away from complexity. These businesses do have valuable assets as potential collateral. But patent portfolios, litigation receivables, fiber networks, or music catalogues are not easy for banks to work with.

In other words, the stage is set for private markets to fill the vacuum.

“We’re in one of the most attractive environments for private credit that I’ve seen in over two decades,” said Bhalwani. Elevated rates, he said, have “exposed the structural fragility of balance sheets” for many companies bought during the last LBO cycle. In Canada, a concentrated banking system and strict capital rules have left even fewer options for borrowers in transition."

Kastner points to a broadening of the market. “Until recently, the perception of private credit consisted of more traditional leveraged finance – cash flow loans supporting private equity buyouts. Over the past 12 years, large asset managers have invested in ABL platforms, many of which have scaled, creating today’s private credit ABL landscape.”

Peck’s asset-backed finance team focuses on what he calls “more esoteric” collateral, from litigation finance portfolios to data center infrastructure. “These aren’t rinse-and-repeat structures. They’re very tailored.” To deliver returns to investors and allow these middle-market businesses to meet their goals, financing these assets requires deep relationships and specialized knowledge.

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