US Midsize Firms Fall Through Banking Gap as Experts Urge Overhaul

US banks have traditionally organized business services around two groups: small companies with straightforward needs and large commercial clients that justify specialized underwriting. Firms generating $1 million to $50 million in annual revenue often fall between those models. Their financing requirements are too complex for standard small-business products but may not meet commercial-banking thresholds, pushing founders to rely on personal credit and slowing hiring, investment and expansion.

A 2023 McKinsey survey covering more than 1,200 US businesses with less than $50 million in annual revenue estimated that small- and midsize-business banking generates about $150 billion in yearly industry revenue. The latest report argues that banks can narrow the service gap by improving internal data sharing, consolidating customer records and redesigning credit reviews. Better access to operating and relationship data would allow lenders to assess risk and growth potential without defaulting to founders’ personal credit histories.