The structural gap in Asia Pacific corporate lending that leaves profitable, creditworthy businesses without access to the capital they need and what to do about it.
Published by
Donald Klip | Co-Founder, Global Mortgage Group | Head, GMG Capital Advisory
30 years of institutional finance. Former hedge fund founder. Senior roles at top global investment banks. GMG Capital Advisory arranges private credit and special situations finance of $10M–$100M for operating companies across Asia Pacific.
[email protected] | +65 9773 0273 | Singapore · Hong Kong | Asia-Pacific
There is a gap in the corporate lending market that most business owners and CFOs only discover at the worst possible moment when they need capital and cannot get it. The gap is not random. It is structural, predictable, and widening. And it sits precisely at the $10M–$100M range that represents the heartland of Asia Pacific’s operating company economy.
The $10M–$100M corporate borrower is too large to be served by SME products and too small to attract institutional capital. Private credit was built to serve exactly this market.
The Three Tiers of Corporate Lending
- Tier 1 — SME lending (below $5M): This market is well-served. Government guarantee schemes, fintech lenders, trade finance platforms, and standardised bank SME products all compete for this segment.
- Tier 2 — Institutional corporate lending (above $100M): Also well-served. Large corporates access syndicated loan markets, investment-grade bond markets, bilateral bank facilities with dedicated corporate banking coverage.
- Tier 3 — Mid-market (the gap: $10M to $100M): Systematically underserved. Too large for automated SME underwriting. Too small for syndicated markets. Too complex for standardised bank templates. Too unprofitable per unit of regulatory capital for banks under Basel III and IV constraints.
Why Banks Have Effectively Exited the Mid-Market
- Regulatory capital cost: Under Basel III and IV risk-weighting frameworks, corporate loans to mid-market businesses require banks to hold substantially more regulatory capital than retail mortgages or government securities.
- Origination cost: Mid-market corporate loans require significant credit analysis, relationship management, legal documentation, and ongoing monitoring. The cost of originating a $20M facility is not materially lower than a $200M facility.
- Covenant and monitoring complexity: Mid-market businesses are complex. Managing the ongoing compliance of a mid-market credit facility is operationally intensive relative to the revenue generated.
- Sector and concentration restrictions: As banks manage portfolio exposures more actively, sector and geographic concentration limits increasingly exclude entire categories of mid-market borrowers regardless of individual credit quality.
The Characteristics of a Mid-Market Lending Gap Borrower
- Revenue typically between $10M and $200M, with EBITDA generating meaningful but not institutional-scale debt capacity
- Profitable and operationally sound, with a track record of meeting obligations, but unable to satisfy increasingly conservative bank credit criteria
- Often owner-managed or family-controlled, with non-standard governance relative to listed company peers
- Frequently operating across multiple Asia Pacific jurisdictions, creating cross-border complexity that exceeds any single bank’s regional appetite
- Asset-rich relative to earnings significant real property, equipment, or contracted revenue streams that represent strong collateral but are assessed conservatively under bank frameworks
What Private Credit Offers the Mid-Market
- Deal-by-deal underwriting: Every transaction is assessed individually by an experienced credit team. No sector exclusion lists. No automated scoring models that cannot accommodate complexity.
- Speed: Without bank committee processes, private credit lenders can move from initial assessment to term sheet in days and from term sheet to funding in weeks.
- Structural flexibility: Private credit facilities are structured around the borrower’s specific situation: the collateral available, the cash flow profile, the repayment source.
- Appropriate pricing: Private credit carries a higher cost than bank lending. For mid-market borrowers who have been unable to access bank credit at any price, private credit pricing is not expensive; it is the market rate for capital they cannot otherwise access.
GMG Capital Advisory was built for the mid-market gap. Our $10M–$100M focus is not a positioning statement, it is a precise description of the market we serve because it is the market that needs us most.
About GMG Capital Advisory
Donald Klip | Co-Founder, Global Mortgage Group | Head, GMG Capital Advisory
Donald Klip has 30 years of institutional finance experience spanning hedge fund management and senior roles at the world’s top global investment banks. GMG Capital Advisory specialises in arranging and structuring corporate debt financing of $10M–$100M for operating companies, asset owners, and project sponsors where conventional bank lending is unavailable, insufficient, or too slow. We operate across 23+ jurisdictions in Asia Pacific.
www.gmg.asia | [email protected] | +65 9773 0273 | Singapore · Hong Kong
The Debt Desk
Corporate private credit intelligence for Asia Pacific’s $10M–$100M middle market. Published by GMG Capital Advisory. Part of the Private Credit Asia content series.
www.gmg.asia | Read all 41 articles in the series
