Characteristics of middle market companies that are strong candidates for cash flow financing would include the following:

• Experienced and committed management teams
• Competitive advantage and defensible market share in stable or growing industries
• Diversification in products, customers, suppliers and service area
• Track record of consistent performance with margins that validate market position
• Strong historical operating cash flow
• High degree of recurring revenue
• High customer retention and longstanding customer relationships
• Diversified business with multiple sources of enterprise value
• Operates in a mature industry with established participants
• Combination of switching costs and/or customer inertia