Marquette Financial Cos. announced Monday that it has partnered with three Chicago lenders to form a leveraged lending firm that will target lower middle-market companies.

MFC Capital Funding will be based in Chicago.

Leveraged finance lending, which relies on a company’s cash flow and/or collateral, is used to fund growth situations, restructurings, recapitalizations and mergers and acquisitions.

MFC’s senior secured products will include cash flow multiple, structured finance and asset- based loans. The firm will offer loans to companies with credit requirements ranging from $3 million to $25 million.

The new firm will expand Minneapolis-based Marquette’s presence in commercial finance, Bert Colianni, executive vice president and chief operating officer, said in a statement.

Joseph Gaffigan and Christopher Randall, former senior executives with Fifth Third Bank in Chicago, will lead the firm. Gaffigan will serve as president and CEO; Randall will be senior marketing manager and chief operating officer.