Rate hikes were basically a stress test for Canadian mid-market businesses - and a lot of them failed quietly

When BoC was hiking aggressively everyone (understandably) fixated on mortgages. But what about mid-market businesses - you know, too big for small commercial loans, too small for public debt markets - that had quietly loaded up on cheap leverage during the zero-rate era? Like did anyone actually run the numbers on what happens to their balance sheets when cost of capital doubles overnight?

I think, not great. A lot of these companies didn't blow up publicly (no headlines or "dramatic" CCAA filings) - they just started getting quietly rejected by the Big 6 and scrambling for alternatives. Which ngl is kind of wild when you think about how little coverage this got.

And that's where it gets interesting. The argument TEC makes - and honestly it tracks - is that traditional lenders simply aren't built to underwrite complexity. They're running rigid models off historical financials while completely ignoring underlying asset value and actual business trajectory. Which… makes sense why they keep saying no, but also means a ton of viable businesses are getting left out in the cold?

So genuine question is this a temporary dislocation or a permanent restructuring of Canadian mid-market credit? Either way, feels like not enough people are paying attention to where the capital is actually flowing. What do you think?