Financing the MSP Roll-Up

In this episode of M&A Insights, Madhur Duggar sits down with Reed Van Gorden, Head of Origination at Deerpath Capital, to unpack IT services financing from the lender’s perspective. Reed shares how private credit firms evaluate MSPs, why lenders are increasingly attracted to the IT services sector, and what separates a financeable business from one that struggles to secure capital.

The conversation covers Deerpath’s lending model, underwriting frameworks, and the key metrics lenders focus on — including recurring revenue quality, contract structures, customer concentration, and management dependency. Reed also explains how private equity sponsors and lenders work together during acquisitions and growth phases, typical deal structures and loan terms, and what MSP owners can do today to position themselves for better financing outcomes.

If you’re an MSP owner thinking about acquisitions, growth capital, or a future exit, this episode offers a rare look inside the credit playbook behind today’s deals.

Topics covered:

• Why private credit lenders like IT services businesses?
• How MSPs are evaluated during underwriting
• Recurring vs. re-occurring revenue from a lender’s lens
• Contract length and revenue visibility
• Why are sponsors so important for Lenders when doing their due diligence?
• Common financing structures and terms in MSP transactions
• Practical advice for founders seeking capital
• The state of private credit lending and what could cause it to turn