In a blog post on PEHub.com, Ron Kahn, managing director of Lincoln International, noted that leverage loan volume is substantially down from the same period last year.

Kahn said, according to S&P, approximately 70% of middle-market loans are now provided by non-bank institutions. And while banks shy away from the middle market due to their decreased appetite for risk and increased regulatory constraints, non-bank lenders such as BDCs, hedge funds and credit opportunity funds have recognized this dislocation and eagerly entered the market.

However, Kahn noted these non-bank institutions have a different constituency to please, and, as a result, have limited ability to move loan interest rates down, even when volume falls.

To read the blog post on PEHub.com, click here.