“The Cracks in the Middle Market Deepen”: Marblegate & RapidRatings, Full-Year 2025 Data

Marblegate’s latest report with RapidRatings analyzes full-year financials for more than 1,200 private middle-market companies against their public peers and finds a divergence that has widened every year since 2019. Private middle-market EBITDA is down 42% (public peers are up 31%), margins are down 44%, liabilities have risen more than 70%, and leverage has roughly tripled, with working capital increasingly consuming cash flow. With the average company’s interest coverage now below 1x, roughly a quarter of middle-market borrowers can no longer cover their own interest payments from operations. The deterioration is broad, multi-sector, and accelerating, and the report argues that resolving it will demand genuine restructuring expertise rather than financial engineering.


A Deepening Divergence Reveals a Fractured Economy


Middle market companies’ underperformance versus their public peers raises questions of solvency

Marblegate’s latest report with RapidRatings analyzes full-year financials for more than 1,200 private middle-market companies against their public peers and finds a divergence that has widened every year since 2019. Private middle-market EBITDA is down 42% (public peers are up 31%), margins are down 44%, liabilities have risen more than 70%, and leverage has roughly tripled, with working capital increasingly consuming cash flow. With the average company’s interest coverage now below 1x, roughly a quarter of middle-market borrowers can no longer cover their own interest payments from operations. The deterioration is broad, multi-sector, and accelerating, and the report argues that resolving it will demand genuine restructuring expertise rather than financial engineering.

  • Marblegate has again partnered with RapidRatings, a leader in supply chain analytics, to analyze the otherwise inaccessible full-year financial data of 1,200+ middle market companies and compare it to their public peers also tracked by RapidRatings.
  • 2025 data extends a multi-year divergence: private middle market companies have deteriorated on every measure since 2019, while public peers have recovered or improved. The gap widened again this year.
  • Earnings power has halved, margins have collapsed, and NPAT, a proxy for cash flow, has turned even more deeply negative. Leverage among middle market companies has increased by 198% since 2019, and the rising cost of capital is eroding debt service capacity while larger peers thrive.
  • Working capital is now an issue of solvency: middle market cash conversion cycles climbed from 60 to 77 days since 2019 while public peers held flat near 52 days. The working capital gap (DPO–DSO) slipped further negative as public peers preserved their cushion.
  • The cumulative damage is severe: EBITDA margins down 44%, NPAT now negative, leverage up roughly 3×, and interest coverage down 78% versus 2019 while public peers improved across every metric.
  • The result is a structural cash shortfall: middle market firms are burning cash and leaning on external funding to cover working capital, with no cushion left for a consumer slowdown or further interest rate pressure. The public / private divergence has become a fracture that will deepen as the current supply chain shock ripples through the system.
  • The ticker tape economy obscures the data. It surfaces only partially in federal and business survey data and indirectly in private data curated by private lenders and their borrowers. The following slides highlight the protracted decline and the urgent need for creative restructuring and capital reallocation at the scale this fracture demands.

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