Although the pandemic environment has been devastating for the business community, small and medium-sized businesses in particular, current trends in business destruction and formation are showing more optimistic trends.

On the left hand side, we show PE middle market deal activity by their backing status. With the onset of the pandemic, deals in 2020, clearly dropped off slightly; however, 2021 data paints a more optimistic picture. Total deal value is just under half of its long-term average after only 1 quarter. On the right chart, applications for business formation surged 77% q/q in the third quarter of 2020. While this is partially a reflection of backlogs from the earlier on in the pandemic, it also appears to be a sign of economic resilience and low rates.