2026私募资本市场研究报告

2026PrivateCapitalMarketsReport

CraigR.Everett,PhD

RevisionDate:June22,2026

PEPPERDINEPRIVATECAPITALMARKETSPROJECT|PRIVATECAPITALMARKETSREPORT2026

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PEPPERDINEPRIVATECAPITALMARKETSPROJECT

ExecutiveDirector

CRAIGR.EVERETT,PhD

Research

IRINAMICUNOVIC,MBA

PEPPERDINEGRAZIADIOBUSINESSSCHOOL

InterimDean

DR.DAVIDM.SMITH

FoundingDirector

DR.JOHNK.PAGLIA

DirectorofMarketingCommunications(PGBS)

HILLARYDORAN

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SINCERETHANKSTOOURGENEROUS2026DONORS

SILVERLEVELSPONSOR

HighlandGlobal

Forinformationonbecomingasponsor,pleasecontactCraigEverettatcraig.everett@.

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May31,2026

Dearfriendsandcolleagues;

Ithasbeenanotherexcitingyearintheprivatecapitalmarkets.Asmacroeconomicuncertainty

continuestoshapelendingandinvestmentbehavior,thisyear'sPepperdinePrivateCapitalMarketssurveycapturesabroadrangeofperspectivesfromseniorlenders,asset-basedlenders,mezzaninefunds,privateequitygroups,venturecapitalfirms,angelinvestors,investmentbankers,business

brokers,businessappraisers,equipmentlessors,factoringfirms,limitedpartners,andprivately-heldbusinessowners.

Forthefirsttimethisyear,weaskedsurveyrespondentsaseriesofquestionsabouttheimpactof

artificialintelligenceontheirbusinesses,fromtheperspectivesoffinancialperformance,headcount,

product/servicequality,andprice.Eachsectionofthisyear’sreportcontainstheresultsfromthese

questions.WearenotseeingsubstantialfinancialreturnsyetforinvestmentinAI,butexpectationsarehighforthefuture.Therealsohavenotyetbeensignificantimpactsonheadcount.

PrivateequityinvestorsreportmedianexpectedIRRsofapproximately20%forcompanieswith$1–$5millioninEBITDA,risingtoapproximately25%formid-marketcompanies,withreturnscompressingatthelargestdealsizesascompetitionforqualityassetsremainsintense.

Intheventurecapitalworld,medianexpectedannualreturnsareapproximately28%forseed-stagecompanies.VCinvestorscontinuetoexercisedisciplineinvaluationsandstage-gatemilestonesasthemarketrecalibratesfromtheexuberanceofprioryears.

Businessappraisersreportamedianequityriskpremiumofapproximately6%andamediandiscountforlackofmarketability(DLOM)of15%,underscoringthemeaningfulvaluationadjustmentsrequiredforprivately-heldcompanyinterestsrelativetotheirpubliclytradedcounterparts.

Thisyear'sreportisavailableindigital(pdf)formatonour

/reports/

website.Wearegratefulfortheongoingsupportofoursponsorsandthethousandsofpractitionerswhocontinuetoparticipateinthisresearch.

Asalways,thankyousomuchforyourcontinuedsupport.

Withsincereappreciation,

CraigR.Everett,PhD

PepperdineGraziadioBusinessSchoolcraig.everett@

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TABLEOFCONTENTS

PrivateCapitalMarketRequiredRatesofReturn

9

LimitedPartnerSurveyInformation

10

BankLendingSurveyInformation

22

Asset-BasedLendingSurveyInformation

33

MezzanineSurveyInformation

44

InvestmentBankerSurveyInformation

58

PrivateEquitySurveyInformation

75

VentureCapitalSurveyInformation

93

AngelInvestorSurveyInformation

105

BusinessAppraiserSurveyInformation

116

BusinessBrokerSurveyInformation

128

FactorSurveyInformation

146

EquipmentLeasingSurveyInformation

159

BusinessOwnerSurveyInformation

165

AbouttheAuthor

206

IndexofTables

207

IndexofFigures

210

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PEPPERDINEPRIVATECAPITALMARKETSSURVEY

ThePepperdineprivatecostofcapital(PCOC)surveywasoriginallylaunchedin2007andwasthefirst

comprehensiveandsimultaneousinvestigationofthemajorprivatecapitalmarketsegments.Thisyear'ssurveywasdeployedinJanuary2026andspecificallyexaminedthebehaviorofseniorlenders,asset-

basedlenders,mezzaninefunds,privateequitygroups,venturecapitalfirms,angelinvestors,privately-heldbusinesses,investmentbankers,businessbrokers,limitedpartners,businessappraisers,equipmentlessors,andfactoringfirms.ThePepperdinePCOCsurveyinvestigates,foreachprivatecapitalmarket

segment,theimportantbenchmarksthatmustbemetinordertoqualifyforeachparticularcapitaltype,howmuchcapitalistypicallyaccessible,whattherequiredreturnsareforextendingcapitalintoday'seconomicenvironment,andoutlooksondemandforvariouscapitaltypes,interestrates,andtheeconomyingeneral.

Ourfindingsindicatethatthecostofcapitalforprivately-heldbusinessesvariessignificantlybycapitaltype,size,andriskassumed.ThisrelationshipisdepictedinthePepperdinePrivateCapitalMarketLine,whichappearsbelow.

Figure1.PrivateCapitalMarketRequiredRatesofReturn

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Thecostofcapitaldatapresentedbelowidentifiesmedians,25thpercentiles(1stquartile),and75th

percentiles(3rdquartile)ofannualizedgrossfinancingcostsforeachmajorcapitaltypeandits

segments.Thedatarevealthatloanshavethelowestaveragecostwhilecapitalobtainedfromangels

hasthehighestaveragecostofcapital.Asthesizeofloanorinvestmentincreases,thecostofborrowingorfinancingfromanyofthefollowingsourcesdecreases.Note:inthisreport,cellswithonlya“—”

indicatecategorieswheretherewerenotenoughsurveyobservationsforameaningfulresult.Alsonotethatthisyear,althoughwehadenoughrespondentstoproduceourABLsectionstoreporttrends,notenoughofthemprovidedinterestratedatatoincludeABLinthistable.

Table1.PrivateCapitalMarketRequiredRatesofReturn

1stQuartile

Median

3rdQuartile

Bank($1Mloan)

6.5%

8.2%

10.0%

Bank($5Mloan)

6.0%

6.8%

8.0%

Bank($10Mloan)

6.2%

6.5%

7.4%

Bank($25Mloan)

6.4%

7.0%

8.0%

Bank($50Mloan)

6.5%

6.5%

8.8%

Mezz($5Mloan)

—

—

—

Mezz($10Mloan)

14.0%

16.0%

17.0%

Mezz($25Mloan)

13.5%

15.0%

17.2%

Mezz($50Mloan)

15.5%

16.5%

17.8%

PEG($1MEBITDA)

15.0%

20.0%

25.0%

PEG($5MEBITDA)

20.0%

25.0%

25.0%

PEG($10MEBITDA)

23.0%

25.0%

30.5%

PEG($25MEBITDA)

—

—

—

PEG($50MEBITDA)

15.8%

19.0%

24.8%

VC(Pre-Seed)

—

—

—

VC(Seed)

24.2%

28.0%

63.6%

VC(EarlyStage)

24.2%

28.0%

35.5%

VC(Expansion)

15.5%

25.5%

28.0%

VC(LaterStage)

—

—

—

Angel(Pre-Seed)

25.5%

33.0%

45.5%

Angel(Seed)

19.2%

25.5%

36.8%

Angel(EarlyStage)

21.8%

25.5%

34.2%

Angel(Expansion)

26.8%

33.0%

40.5%

Angel(LaterStage)

—

—

—

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LIMITEDPARTNERSURVEYINFORMATION

Thissectionpresentsfindingsfrom21limitedpartnerrespondentswhocompletedthe2026PepperdinePrivateCapitalMarketssurvey.Respondentsrepresentarangeofentitytypesandfundsizes,withRealestatefund,Directinvestments,andPrivateequity-growthrepresentingthelargestmeantarget

allocations.Thefollowingfiguresandtablessummarizerespondents'currentandtargetallocations,returnexpectations,andassessmentsofmarketconditions.

•Econ.uncertainty(domestic)wascitedasthetopissuefacingprivately-heldbusinessestodayby

48%ofLPrespondents—byfarthemostcommonresponse—yetonly19%identifieditasthetopemergingissue,suggestingrespondentsexpectthisconcerntorecede.

•Realestatefundleadsmeantargetallocationsat22.1%ofthealternativeassetsportfolio,followedbyDirectinvestmentsat19.2%andPrivateequity-growthat18.6%.

•Privateequity-growthcarriesthehighestmeanreturnexpectationat25.6%,narrowlyaheadof

Venturecapitalat23.5%andDirectinvestmentsat22.9%;historicalfundperformanceandgeneralpartnerqualityremainthemostimportantfactorswhenevaluatingfunds.

•Privateequityallocationsshowedthestrongestyear-over-yearmomentum,with10of16

respondentsreportinganincreaseoverthepasttwelvemonthsandonly2reportingadecrease—anetincreaseof+50%.

•Directinvestmentsleadforward-lookingexpectations,with7of15respondentsexpectingtoincreaseallocationsoverthenexttwelvemonthsagainstonly1expectingadecrease—anetincreaseof+40%;privateequityfollowscloselyat+38%.

•LPrespondentsexpectAItodriveastrikingdivergencebetweenefficiencyandpricingpower:bythe2–3yearhorizon,+88%netexpectimprovedoperationalproductivitywhile25%netexpectpricestodecrease—acombinationthatmaysignalAI-drivencostreductionsflowingthroughtoclients.

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OperationalandAssessmentCharacteristics

Respondentsrepresentadiverserangeofentitytypes.Figure2showsthebreakdownoflimitedpartnerentitytypesamongsurveyparticipants.

Figure2.EntityType

Note:Otherincludesthefollowingwrite-inresponses:RIAwithFamilyOfficeServices;nonprofitentity;InvestmentManager;nonprofit

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Thesizeofrespondents'investableassetsvariesconsiderablyacrossthesurveypopulation.Figure3showsthedistributionofassetsundermanagementorinvestablefunds.

Figure3.AssetsunderManagementorInvestableFunds

Respondentsallocateavaryingportionoftheirtotalportfoliotoalternativeassets.Figure4showsthecurrentallocationtoalternativeassetsasapercentageofthetotalportfolio.

Figure4.CurrentAssetAllocationfor"AlternativeAssets"(%oftotalportfolio)

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Beyondcurrentallocations,respondentswerealsoaskedabouttheirtargetallocationtoalternativeassets.Figure5showsthetargetallocationasapercentageofthetotalportfolio.

Figure5.TargetAssetAllocationfor"AlternativeAssets"(%oftotalportfolio)

Withinthealternativeassetsportfolio,respondentsallocateacrossarangeofstrategies.Figure6showsthemeantargetallocationbyassetclass,withrealestatefundsanddirectinvestmentsrepresentingthetwolargestallocations.

Figure6.TargetAssetAllocationbyAssets(mean%ofalternativeassetsportfolio)

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Returnexpectationsdiffermeaningfullybyassetclassandinformhowrespondentsprioritizecapital

deployment.Figure7showsthemeanannualreturnexpectationfornewinvestmentsacrosseachassetclass,onagrossbasispostfeesandcarry.Privateequitygrowthleadsallassetclassesatameanof

25.6%,followedbyventurecapitalat23.5%anddirectinvestmentsat22.9%.

Figure7.AnnualReturnExpectationsforNewInvestments(mean%,grossreturnspostfees

andcarry)

Note:Otherincludesthefollowingwrite-inresponses:RRE;AgRealEstate;Directlending

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Respondentswereaskedtoidentifytheassetclasscurrentlyofferingthebestrisk/returntrade-off.

Figure8showsthedistributionofresponses.

Figure8.AssetswiththeBestRisk/ReturnTrade-offCurrently

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Beyondassetclass,respondentsidentifiedtheindustrysectortheybelievecurrentlyoffersthebestrisk/returnprofile.Figure9summarizesthoseselections.

Figure9.IndustrywiththeBestRisk/Return

Note:Otherincludesthefollowingwrite-inresponses:AI;Gold&SilverMiningearlystage;Realestateacquisition

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Geographicdiversificationisakeyconsiderationformanylimitedpartners.Figure10showswhichworldregionsrespondentsbelievecurrentlyofferthebestrisk/returntrade-off.

Figure10.WorldGeographicRegionsOfferingtheBestRisk/ReturnTradeoffCurrently

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WithintheUnitedStates,respondentsidentifiedspecificregionsofferingthemostfavorablerisk/returnconditions.Figure11showsthedistributionofthosepreferences.

Figure11.GeographicRegionsintheUSOfferingtheBestRisk/ReturnTradeoffCurrently

Respondentsratedtheimportanceofseveralfactorswhenevaluatingfundinvestments.Table2showsthepercentageofrespondentsassigningeachimportancelevelandtheoverallmedianscoreforeachcriterion.

Table2.ImportanceofFactorsWhenEvaluatingFunds

Criterion

Unimportant

Oflittle

importance

Moderatelyimportant

Important

Very

important

Score

Historicalfundperformance

0.0%

5.9%

11.8%

58.8%

23.5%

4.0

DPI(Returnedcapital)

0.0%

0.0%

23.5%

58.8%

17.6%

3.9

RVPI(Residualvalue)

0.0%

5.9%

41.2%

35.3%

17.6%

3.6

Generalpartner

0.0%

5.9%

11.8%

11.8%

70.6%

4.5

Specificstrategy

5.9%

0.0%

5.9%

52.9%

35.3%

4.1

Specificlocation

11.8%

35.3%

5.9%

17.6%

29.4%

3.2

Gutfeel/instinct

23.5%

35.3%

23.5%

11.8%

5.9%

2.4

Other

33.3%

0.0%

0.0%

33.3%

33.3%

3.3

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Note:Otherincludesthefollowingwrite-inresponses:risk;MacroEnvironment;familyofficereferrals

Limitedpartnerswereaskedtorankthemostsignificantissuesfacingprivately-heldbusinessesbothtodayandonanemergingbasis.Figure12showsthepercentageofrespondentsrankingeachissueasthenumberoneconcern.

Figure12.IssuesFacingPrivately-HeldBusinesses

Note:Otherincludesthefollowingwrite-inresponses:ImpactofAI

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Respondentswereaskedhowarangeofportfolioandmarketindicatorshavechangedrelativeto

twelvemonthsago.Table3summarizesthenetdirectionofchangeacrosskeyallocationandbusinessconditionmetrics.

Table3.GeneralBusinessandIndustryAssessment:Todayversus12MonthsAgo

Item

vs.12MoAgo

%Increase

%Decrease

NetIncrease

Allocationtoventurecapital

▽(3up/8same/4down)

20.0%

26.7%

-6.7%

Allocationtoprivateequity

▲(10up/4same/2down)

62.5%

12.5%

+50.0%

Allocationtomezzanine

▽(0up/11same/2down)

0.0%

15.4%

-15.4%

Allocationtohedgefunds

▽(2up/9same/4down)

13.3%

26.7%

-13.4%

Allocationtosecondaryfunds

▲(3up/9same/2down)

21.4%

14.3%

+7.1%

Allocationtorealestatefunds

→(3up/8same/3down)

21.4%

21.4%

+0.0%

Directinvestments

▲(8up/5same/3down)

50.0%

18.8%

+31.2%

Generalbusinessconditions

▲(8up/4same/4down)

50.0%

25.0%

+25.0%

Expectedreturnsonnewcapital

▽(2up/10same/4down)

12.5%

25.0%

-12.5%

Lookingahead,respondentssharedtheirexpectationsforthesamesetofindicatorsoverthenexttwelvemonths.Table4summarizesthoseforward-lookingassessments.

Table4.GeneralBusinessandIndustryAssessmentExpectationsovertheNext12Months

Item

Next12Months

%Increase

%Decrease

NetIncrease

Allocationtoventurecapital

▲(5up/6same/4down)

33.3%

26.7%

+6.6%

Allocationtoprivateequity

▲(8up/6same/2down)

50.0%

12.5%

+37.5%

Allocationtomezzanine

→(2up/10same/2down)

14.3%

14.3%

+0.0%

Allocationtohedgefunds

→(3up/8same/3down)

21.4%

21.4%

+0.0%

Allocationtosecondaryfunds

▲(3up/10same/2down)

20.0%

13.3%

+6.7%

Allocationtorealestatefunds

▲(6up/9same/2down)

35.3%

11.8%

+23.5%

Directinvestments

▲(7up/7same/1down)

46.7%

6.7%

+40.0%

Generalbusinessconditions

▲(5up/8same/3down)

31.2%

18.8%

+12.4%

Expectedreturnsonnewcapital

▲(5up/7same/4down)

31.2%

25.0%

+6.2%

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Respondentswereaskedhowartificialintelligencehasaffected,orwillaffect,sixkeydimensionsoftheirorganizationacrossfourtimehorizons.

Table5.ImpactofArtificialIntelligenceonYourOrganization

BusinessDimension

UpUntilNow

WithinNextYear

Next2–3Years

4+Years

FinancialPerformance

-12%

+25%

+75%

+75%

OperationalProductivity

+12%

+62%

+88%

+100%

JuniorLevelHeadcount

-12%

-25%

+12%

+0%

SeniorLevelHeadcount

-12%

+12%

+12%

+12%

QualityofProduct/Service

+0%

+25%

+50%

+50%

PriceofProduct/Service

+0%

-12%

-25%

-25%

Note:Netpercentage=%reportingimprovementminus%reportingdecrease(SignificantlyorSlightlyImproved/Decreased).Positivevaluesindicatenetimprovement.

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BANKLENDINGSURVEYINFORMATION

Thissectionpresentsfindingsfrom13banklendingrespondentswhocompletedthe2026Pepperdine

PrivateCapitalMarketssurvey.Therespondentgroupincludesarangeofcommerciallenders,from

communitybankstolargerregionalinstitutions.Domesticeconomicuncertaintyemergedasthe

dominantissuein2026,displacinginflationfromthetopposition,whilebanklendersmaintainabroadlycautiousoutlookforcreditqualityandgeneralbusinessconditionsintheyearahead.

•Econ.uncertainty(domestic)displacedinflationasthetopissuefacingprivately-heldbusinesses,

ranked#1by38.5%ofbankrespondentsin2026,asshiftingrateconditionsrefocusedconcernfrompricelevelstogrowthprospects.

•Generalbusinessconditionsdeterioratedoverthepasttwelvemonths(net-33.3%)and

expectationsfortheyearaheadareequallysubdued—reflectingasustainedperiodofcautionacrossthecommerciallendingmarket.

•Qualityofearningsanddebtloadremainedtheleadingreasonscitedforloandeclinations,

underscoringthecontinuedprimacyofcashflowfundamentalsandleveragedisciplineincurrentunderwriting.

•Interestratespreadsnarrowedsharplyoverthepastyear(net-44.5%),whilecreditqualityof

applicantsisthesharpestforwardconcern—5of9respondentsexpectfurtherdeteriorationinthecomingtwelvemonths.

•Amajorityofbankrespondents(7of13)participateingovernment-guaranteedloanprograms,andaverageloansizeexpandedoverthepastyear(net+33.3%),withforwardexpectationspointingtocontinuedgrowth(net+44.4%).

•BanklendersprojectastarkAI-drivenworkforcebifurcation:operationalproductivityisexpectedtoimprove+100%netwithin2–3years,whilejunior-levelheadcountisprojectedtocontract-75%netoverthesamehorizon—suggestingsignificantautomationofroutineanalysisroles.

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OperationalandAssessmentCharacteristics

Thebanklendingrespondentsrepresentarangeofinstitutiontypes.Figure13showsthebreakdownoflendingentitydescriptionsamongsurveyparticipants.

Figure13.DescriptionofLendingEntity

Note:Otherincludesthefollowingwrite-inresponses:CDFI;BDC/PrivateCredit;PrivateCreditandDirectLending;SBACertifiedDevelopmentCompany

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Participationingovernmentloanprogramsvariesacrossrespondents.Figure14showstheproportionofbanklendersthatparticipateingovernment-sponsoredloanprograms.

Figure14.ParticipationinGovernmentLoanPrograms

Banklendersserveborrowersacrossarangeofloansizes.Figure15showsthepercentageof

respondentswhotypicallyprovideloansineachsizecategory;respondentscouldselectmultiplesizes.

Figure15.LoanSizesProvided(%ofRespondents)

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Table6summarizesmedianinterestrates,terms,commitmentfees,andclosingfeesforbankloans,brokenoutbyloansizecategory.

Table6.GeneralCharacteristics—BankLoansbySize

LoanSize

InterestRate

Term(medianyears)

CommitmentFee

ClosingFee

<$1M

8.25%

3.5

0.05%

0.75%

$1M–$5M

6.75%

5.0

0.10%

0.50%

$5M–$10M

6.50%

5.0

0.50%

0.75%

$10M–$25M

7.00%

5.0

0.50%

1.00%

$25M–$50M

6.50%

5.0

0.50%

1.00%

$50M–$100M

6.50%

4.0

0.35%

0.65%

SeniorleveragemultiplesvarybyindustryandborrowerEBITDAsize.Table7showsmedianseniorleveragemultiplesbyindustryandEBITDAsizebucket,withanoverallmedianinthefinalrow.

Table7.SeniorLeverageMultiplebyEBITDASize(medianbyindustry)

Industry

Under$5M

$5M-$10M

$10M-$25M

$25M-$50M

$50M+

Manufacturing

3.50x

2.75x

3.38x

3.50x

3.50x

Construction&engineering

3.25x

3.25x

3.00x

2.75x

3.25x

Consumergoods&services

2.75x

3.00x

3.25x

3.50x

3.00x

Wholesale&distribution

2.88x

2.62x

2.50x

3.00x

3.00x

Businessservices

3.00x

2.75x

3.50x

3.62x

3.75x

Basicmaterials&energy

2.75x

2.75x

2.50x

2.75x

3.00x

Healthcare&biotech

3.75x

3.12x

3.38x

3.25x

3.25x

Informationtechnology

3.00x

3.00x

3.00x

3.50x

3.50x

Financialservices

2.88x

3.75x

3.75x

3.75x

3.88x

Media&entertainment

2.00x

3.00x

3.00x

3.25x

3.00x

Other

1.38x

4.00x

4.00x

—

—

OverallMedian

3.00x

3.00x

3.00x

3.25x

3.38x

Note:Otherincludesthefollowingwrite-inresponses:Realestate

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Borrowermotivationsforseekingfinancingreflectprevailingeconomicconditions.Figure16showsthemedianpercentageofbankloanvolumeattributabletoeachborrowermotivationoverthepasttwelvemonths.

Figure16.BorrowerMotivationtoSecureFinancing(past12months,median%)

Respondentsratedtheimportanceofkeyfinancialevaluationmetricsforcashflowbasedlending.Table8showsthedistributionofimportanceratingsandthemeanscore(1=Unimportant,5=Very

important)foreachmetric.

Table8.ImportanceofFinancialEvaluationMetrics

Metric

Unimportant

Oflittle

importance

Moderatelyimportant

Important

Very

important

Score

Currentratio

20.0%

20.0%

40.0%

20.0%

0.0%

2.6

SeniorDSCR/FCC

0.0%

0.0%

11.1%

44.4%

44.4%

4.3

TotalDSCR/FCC

0.0%

0.0%

10.0%

40.0%

50.0%

4.4

Seniordebt/cashflow

11.1%

0.0%

33.3%

33.3%

22.2%

3.6

Totaldebt/cashflow

11.1%

0.0%

22.2%

33.3%

33.3%

3.8

Debttonetworth

20.0%

20.0%

40.0%

10.0%

10.0%

2.7

Note:Otherincludesthefollowingwrite-inresponses:LoantoCollateralValue

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Beyondimportanceratings,respondentsprovideddataonthefinancialmetricstheyobserveintheiraverageborrowerversustheirapprovalthresholds.Table9summarizesthosemedianvalues.

Table9.FinancialEvaluationMetrics—AverageBorrowerData

Metric

AvgBorrower(median)

ApprovalThreshold(median)

Currentratio

1.20

1.00

SeniorDSCR/FCC

1.50

1.25

TotalDSCR/FCC

1.30

1.20

Seniordebt/cashflow

3.38

4.25

Totaldebt/cashflow

4.25

4.75

Debttonetworth

4.00

5.00

Note:Otherincludesthefollowingwrite-inresponses:LoantoCollateralValue

Personalguaranteerequirementsandcollateralusagedifferbyloansize.Table10showsthemostcommonlyreportedpersonalguaranteeandcollateralpracticesacrossloansizecategories.

Table10.PersonalGuaranteeandCollateral—%OccurrencebyLoanSize

LoanSize

PersonalGuarantee

Collateral

<$1M

95%-100%

95%-100%

$1M$5M

95%-100%

95%-100%

$5M$10M

71%-75%

0%-5%

$10M$25M

0%-5%

0%-5%

$25M$50M

0%-5%

0%-5%

$50M$100M

0%-5%

0%-5%

Table11showstotalapplicationvolumeacrossallrespondentsbyloantype.Offered,booked,and

declineratesarecalculatedasapercentageofdecidedloans(offeredplusdeclined),sothatofferedanddeclineratesumto100%withineachloantype.

Table11.ApplicationsData

LoanType

Reviewed(total)

Offered(%ofdecided)

Booked(%ofdecided)

DeclineRate

Cashflowbased

85

66%

59%

34%

Collateralbased

26

62%

50%

38%

Realestate

62

83%

62%

17%

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Whenloansaredeclined,qualityofearningsanddebtloadarethemostcommonreasonscited.Figure17showsthemedianpercentageofdeclinedloansattributabletoeachreason.

Figure17.ReasonforDeclinedLoans(median%)

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Revenuegrowthrateisanincreasinglyimportantunderwritingconsiderationforcashflowbasedlending.Figure18showshowrespondentsrateditsimportancefornewcashflowbasedloans.

Figure18.ImportanceofRevenueGrowthRateforNewCashFlowBasedLoans

Figure19showsthedistributionoftheaveragerevenuegrowthrateobservedintherespondents'borrowerbase.

Figure19.RevenueGrowthRate—AverageBorrowerData

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Banklenderswereaskedtorankthemostsignificantissuesfacingprivately-heldbusinessesbothtodayandonanemergingbasis.Figure20showsthepercentageofrespondentsrankingeachissueasthe

numberoneconcern.

Figure20.IssuesFacingPrivately-HeldBusinesses

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Respondentsassessedhowabroadrangeofle