Expectations for lenders are high, as private equity firms seek the best financing options for deals. The pressure from PE is pushing lenders to provide less-traditional, more-varied financing structures, giving private equity firms a wide range of options. In the past, PE firms were conditioned to accept more traditional products. Lenders didn’t have to provide creative loan structures, because there wasn’t any demand for them.

But when the recession hit, lenders were forced to innovate to create more yield, and that search has continued in the recession’s wake. The trend lives on because many private equity firms like the full menu.

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