Emerging Middle Market Growth Needs Credit That Moves With Inventory

A distributor can know what inventory it needs to order next week before its financing system knows that the purchase exists.

That disconnect becomes more consequential as goods and logistics companies grow. Among businesses with $1 million to $25 million in annual revenue, 28% identify flexible credit as an essential need. Among those with $25 million to $50 million in revenue, the share rises to 46%, according to the July 2026 report “The Emerging Middle Market: How Middle Market Businesses Pay, Borrow and Scale.”

The report, produced in collaboration between PYMNTS Intelligence and i2c, is based on a February survey of 1,011 U.S. businesses across five industries. PYMNTS Intelligence retained editorial control over the findings, methodology and data analysis.

For goods and logistics firms, the findings expose an unusual mismatch. Their payment operations become simpler as they scale, while the financing supporting their physical operations remains disconnected from the systems that tell them when and where money will be needed. The average goods and logistics company uses three payment providers. Among smaller businesses, 35% use four or more providers, but that share falls to 15% among larger companies. The 20-percentage-point decline indicates that companies are consolidating payment operations as they grow rather than continuing to add providers.

Credit does not appear to be following the same path.

Goods and logistics firms have a relatively broad financing mix. Lines of credit are used by 38% of surveyed firms, followed by invoice financing at 29%. Equipment loans are used by 24%, while 22% use trade credit. Those products match the needs of businesses that routinely finance inventory, equipment and receivables.

The difficulty is coordination.

Credit Outside the Operating Workflow

The report finds that asset loans, lines of credit and trade credit tend to reside separately from inventory counts, purchase orders and delivery schedules. A company may therefore have visibility into an upcoming restocking requirement without its financing being able to respond on the same timetable.

That helps explain why demand for flexible credit rises with company size. As purchasing volumes increase, the timing and amount of financing required also change. The report finds that when financing and day-to-day operations run on separate systems, larger companies can be left with credit that does not keep pace with purchasing needs.

Importantly, the data does not depict goods and logistics companies as broadly starved for financing. They have one of the lowest rates of frequently missed growth opportunities in the survey, at 28%, and just 9% rely on personal funds for more than half of their financing needs.

That shifts attention toward how existing credit is accessed and deployed.

The report identifies a more integrated model in which financing responds to the operating information already generated by the business. Credit could be triggered by a purchase order rather than requiring a separate approval process, for example, and decisions could incorporate operational data rather than treating financing as an isolated function.

System integration itself is a stated priority. Overall, 49% of goods and logistics businesses identify better system integration as an essential need, a share that rises to 53% among larger companies.

The contrast is difficult to ignore. These companies already generate the inventory, purchasing and delivery information that signals when capital will be required. Their payment operations also become more consolidated as they grow.

The report’s findings point toward connecting those pieces: financing informed by the same operating data that drives the purchase, rather than requiring a company to move from an automated operating workflow into a separate financing process whenever it needs capital.