Middle market businesses prioritize access to capital, supply chain visibility, and adapting to tariffs
Opportunities for increasing market share and growth are a key part of the tariff response strategy for many middle market business leaders according to KeyBank’s latest Middle Market Sentiment research. While 2025 headlines have focused on unpredictable economic policy changes and market turmoil, business leaders are finding opportunity amid the uncertainty.
According to the survey, roughly half of middle market business leaders see tariffs as a competitive opportunity: 49% expect to gain market share as a result of tariffs, and only 17% anticipate losing market share. Among middle market companies in the technology sector, 68% said they expect to gain market share because of tariffs.
Middle market businesses aren’t just reacting to shifts in policy. They’re proactively looking for ways to gain a competitive edge.
Ken Gavrity
Head of Key Commercial Bank
KeyBank conducted the Middle Market Sentiment Pulse Survey in May 2025 to gauge sentiment amongst middle market business leaders amid the current economic uncertainty. The survey polled executives of businesses with annual revenues ranging from $25 million to $1 billion and found that potential tariffs are significantly influencing investment decisions, with most companies prioritizing supply chain adjustments and closely monitoring market signals before implementing growth strategies.
Tariffs have become a core factor in investment and other business decision-making. Overwhelmingly (91%), business leaders surveyed were focused on managing the impact of tariffs, even as roughly half (49%) saw opportunities to capture market share and invest in growth.
Businesses plan to improve supply chain visibility, pass along increased costs, and capture market share
When asked which strategies they’re considering implementing to manage increased costs from tariffs, the top answer was “adjusting supply chain strategies,” selected by 60% of respondents — including 74% of those from companies with revenues between $500 million and $1 billion. In addition, roughly half of those surveyed said they were considering passing costs to customers (53%) or vendors (47%).
Middle market businesses that are focusing on supply chain visibility in response to tariffs are looking to technology for solutions: 88% of those planning to adjust their supply chain strategies said they expect to improve supply chain visibility by enhancing technology. While diversifying suppliers, sharing costs and negotiating contracts with vendors, and increasing inventory levels are also in the mix, tech-driven supply chain adjustments ranked as the top tactic for managing tariff costs.
Everybody’s talking about automation, layering in more software and tapping into artificial intelligence to drive efficiency. If you’re in the technology industry, you’re saying, ‘That’s a great tailwind for us.’
Ken Gavrity
Head of Key Commercial Bank
Access to capital is a top priority for middle market businesses
Middle market business leaders are also closely monitoring capital providers as they navigate the current economic environment. In light of recent economic policy, 87% of those surveyed cited expanding their access to capital as a priority. Among those, more than half are adopting technology and automation (selected by 52%), expanding equity capital (43%), and improving cash flow management (also 43%) and cost reduction (40%).
Just under a quarter (21%) of those prioritizing access to capital said they planned to expand their debt capacity. For those seeking debt vehicles, 57% are seeking new banking partners, compared to 40% who will look to expand debt with their incumbent banks, and 3% who are exploring non-bank sources.
Access to capital is also a factor in business leaders’ approach to investing in their companies. When asked which market signals influenced their investment decisions, about half of respondents selected “more capital providers willing to support growth,” after “clarity on health of the U.S. economy” (61%) and “certainty on U.S. tariff plans” (61%). Twenty-two percent of those surveyed said access to capital was the most important market signal when determining whether to invest more heavily in their businesses. Customer tolerance for price absorption (49%) and declining interest rates (41%) were less important factors in their decision making.
Our survey findings suggest that middle market businesses have adapted to the current interest rate environment. Rather than waiting for interest rates to come down, they’re focusing on other market signals to determine the right time to invest in their businesses.
Ken Gavrity
Head of Key Commercial Bank
Leaders in the middle market segment see opportunity even amid a rapidly evolving macroeconomic environment. Working with capital providers who understand their vision, and can deliver capital in many different forms, can position companies to adapt quickly, invest wisely, and thrive.
With a focus on understanding the unique dynamics of middle market businesses, KeyBank can help business leaders navigate challenges and seize new opportunities with confidence. Our relationship-driven approach and ability to access and deliver a broad range of debt and equity capital means that as the economy shifts, we stay focused on our clients’ success — not just for today, but for years to come.
To see how we can help you reach your goals, contact us or visit key.com/commercial.