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Middle-Market Loan Defaults May Jump to 10% Amid Shutdowns

  • Lenders expected to be flexible in handling non-accrual loans
  • Financing for mid-sized borrowers to pick up in late 2020
    

Source: Getty Images

Middle-market loan default rates are likely to soar in the second half of the year as business shutdowns due to the coronavirus pandemic take their toll, according to a survey released Wednesday by Carl Marks Advisors.

Three-quarters of the respondents said default rates among non-investment grade borrowers will hit or exceed 10%. The middle-market advisory firm and investment bank received responses from 110 financial advisers, lawyers and lenders in late April.