Which criterion is typically evaluated in a mid-ticket credit process?

• A. 2-3 years financial analysis (statements)
• B. TIB
• C. New/Used equipment
• D. Equipment location

Answer: (A)

In mid-ticket lending, the ability to generate cash to service debt is the primary concern. Looking at two to three years of financial statements gives a clear view of the borrower’s cash flow, profitability, liquidity, and leverage over time, capturing trends and cycles that a shorter window might miss. This history lets you calculate the debt service coverage ratio and evaluate whether earnings are stable or improving enough to reliably cover payments on that level of credit. While factors like whether the equipment is new or used or its location can affect collateral value or ease of repossession, they don’t determine repayment capacity as directly as the borrower’s cash flow does. So the two-to-three year financial analysis best informs the decision in a mid-ticket scenario.