Why High-Growth Businesses Can’t Use the Credit They Already Have

Traditional thinking holds that the defining challenge for middle market businesses is around achieving growth.

But traditional thinking can be wrong, and today, that equation has flipped. Findings in a new report, “The Emerging Middle Market: When Operational Complexity Grows Faster Than Financial Infrastructure,” a collaboration between PYMNTS Intelligence and i2c, reveal that the fastest-scaling companies—those generating between $1 million and $50 million in revenue—are not struggling to expand.

They are struggling to keep up with themselves.

More than half of these companies expect to cross the $50 million revenue threshold within the next five years, a signal of both ambition and momentum. But beneath that optimism lies a structural weakness: financial infrastructure that has failed to evolve alongside operational complexity.

Among the fastest-growing firms, nearly half (46%) frequently miss growth opportunities due to insufficient credit. Credit exists, sure, but the report found that available solutions are frequently misaligned with the speed, structure and volatility of high-growth businesses.

In practice, the problem is not a lack of credit, but a lack of fit. Only 43% of fast-growing firms say their financial tools match their current scale, compared to 75% of slower-growing peers.

High Growth Firms Are Flying Blind on Cash Flow

On paper, access to credit does not appear to be the problem. In fact, 87% of emerging middle market firms report having sufficient or more-than-sufficient credit available. Access, however, is not the same as usability.

Traditional lending models evaluate companies using backward-looking metrics such as profitability, credit scores and historical cash flow. But high-growth firms, by definition, are forward-looking entities. Their financial profiles are shaped by reinvestment, rapid scaling and uneven cash cycles—conditions that often fail to meet conventional underwriting standards.

When institutional credit fails and visibility is limited, firms turn to the most immediate source of capital available: themselves. The report data found that personal financing has become nearly universal among emerging middle market businesses, with 87% drawing on personal funds to support operation.

Founders and executives are effectively underwriting their own growth, absorbing risk that would traditionally be distributed across financial institutions. Personal balance sheets become extensions of corporate finance, which can mean that risk tolerance becomes a limiting factor in strategic decision-making.

Read the report: The Emerging Middle Market: When Operational Complexity Grows Faster Than Financial Infrastructure

At the core is a fundamental mismatch between tools and trajectory. Financial systems are often selected during earlier stages of growth and remain in place long after the business has outgrown them.

Upgrading is not straightforward. Time constraints, implementation complexity and operational disruption all act as barriers. For companies already stretched by growth, modernization becomes a deferred priority. This creates a feedback loop. Outdated systems limit visibility and control, which in turn exacerbates financial strain, making it even harder to invest in better systems.

While mid-market firms can be blind to their cash, they are increasingly clear-sighted about the constraints they face. Nearly half of emerging middle market businesses say that faster, more predictable payments would directly enable growth or improve cash-flow visibility.

Integration across financial systems, flexible credit solutions and real-time data access are consistently cited as top priorities.

For financial institutions, FinTech platforms and payments providers, the message is unambiguous. The opportunity is not simply to extend more credit, but to redesign how credit is delivered. Not just to process payments, but to integrate them into a broader financial ecosystem.

The emerging middle market, after all, is not a niche segment. It is a pipeline of future enterprise companies. The firms that close this gap will not just grow. They will capture the opportunities others are forced to leave behind.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.