Cross-Border Capital: Why Global Mid-Market Companies Are Looking to Canada and the U.S. for Growth Financing
In recent years, both Canada and the United States have experienced a surge in investment from global mid-market firms. From public market activity to private placements, it is increasingly evident that North America remains a dominant force in capital access, investor appetite, and financial innovation.
United States: A Magnet for Global Capital
The United States remains home to some of the deepest capital markets in the world, a point underscored by Canadian economist and former Bank of Canada Governor, Mark Carney. The U.S. accounts for approximately 40% of global equity and fixed income markets (SIFMA Capital Markets Fact Book), reflecting a mature and liquid investor base.
Contributing to this depth is the rapid expansion of the private credit market, which ballooned to US$1.5 trillion in 2024 (PitchBook), making the U.S. the largest private lending environment globally. Institutional appetite for alternative lending structures has been a major tailwind, particularly in the middle-market segment.
The U.S. mid-market is also drawing increasing international attention. In Q4 2024, global investment firm KKR raised US$4.6 billion for its debut middle-market fund, signaling robust domestic and cross-border demand. According to FS Investments, U.S. middle-market firms with lower valuation multiples posted 9.3% earnings growth, outpacing the 7.1% reported by large-cap companies.
From a financing perspective, global mid-market companies are drawn to the U.S. for its relatively low cost of capital and diversified investor base. While data on private deals remains opaque, public market trends suggest a growing shift: more European firms are choosing to list on U.S. exchanges (Euronews), seeking deeper liquidity and broader institutional support.
As John Tuttle of the New York Stock Exchange noted at the 2025 World Economic Forum in Davos:“No matter how you look at the data, the United States is the deepest pool of liquidity and capital in the world. It has the broadest investor base and many analysts and investors focused on growth—not just dividends and value.”
In addition to capital market depth, the U.S. regulatory environment—more permissive of innovation in areas such as AI, semiconductors, and cryptocurrency—has become a competitive differentiator, especially compared to Europe’s more bureaucratic systems and frequent LSE outages.
Tariff Impact:
However, new challenges have emerged in the form of sweeping tariff announcements from the Trump administration, aimed at addressing trade imbalances. These tariffs have heightened market volatility and raised recession concerns. For public companies, especially those with market capitalizations between $25 million and $500 million, this environment presents both risk and opportunity. Strategic responses—including refined business plans, supply chain diversification, and clear investor communication—are essential for navigating the current climate and maintaining access to U.S. growth capital.
Canada: A Stable, Strategic Alternative
Canada has quickly positioned itself as a leading destination for global mid-market firms seeking stable, growth-oriented financing. Its strengths lie in financial system resilience, regulatory balance, government incentives, and access to top-tier talent.
Canada’s conservative banking framework, underpinned by strong fiscal oversight, provides mid-sized companies with predictability and reduced risk. This is particularly valuable in an era marked by global macroeconomic uncertainty and interest rate fluctuations.
The country’s rigorous regulatory environment further enhances its appeal. Agencies like the Office of the Superintendent of Financial Institutions (OSFI) maintain a balance between transparency and innovation, allowing financial institutions and businesses to operate with confidence and credibility.
Canada also offers a wide spectrum of funding mechanisms. In addition to traditional bank debt, mid-market firms can access venture capital, private equity, and public markets. Institutions like the Business Development Bank of Canada (BDC) offer tailored transition and growth financing, while the Canada Small Business Financing Program (CSBFP) reduces lender risk to promote accessible credit.
Government-backed programs such as the Scientific Research and Experimental Development (SR&ED) tax credit encourage innovation by offsetting R&D costs. Export Development Canada (EDC) further strengthens Canada's offering by providing capital, insurance, and advisory services for companies expanding internationally.
Canada’s diverse and highly skilled labor force is another key advantage. Open immigration policies, coupled with a multicultural and collaborative society, provide access to technical, operational, and management talent across sectors.
Tariff Strategy Considerations:
Unlike the U.S., Canada has adopted a more measured approach to global trade, positioning itself as a stable alternative amid tariff-induced disruptions. As mid-market firms reassess supply chains and market entry strategies, Canada offers a compelling mix of accessibility, innovation, and political predictability—ideal for companies looking to de-risk their capital strategy.
Conclusion
Both the United States and Canada present attractive, albeit distinct, capital market opportunities for global mid-market companies. While the U.S. offers unmatched depth and liquidity, Canada provides stability, innovation support, and a welcoming environment for long-term growth. As tariffs and market uncertainty reshape the financing landscape, companies that act decisively—by refining their strategy, strengthening investor relations, and diversifying funding sources—will be best positioned to thrive in this new era of cross-border capital.
About ArcStone Securities and Investments Corp.
ArcStone Securities and Investments Corp. is a leading financial services firm specializing in capital markets, corporate finance, and strategic advisory services. We assist clients in raising growth capital, navigating IPOs and RTOs, and executing mergers and acquisitions with precision and expertise. Additionally, we provide comprehensive debt financing solutions and a wide range of financial services to meet the unique needs of our clients. Our dedicated team of professionals offers tailored solutions to help businesses achieve their financial objectives and thrive in a competitive market. Discover how ArcStone can support your growth journey by visiting our website at arcstoneglobalsecurities.com.
ArcStone Financial Pulse Team
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