Canada - BDC and/or CBSFP Acquisition Financing

searcher profile

March 23, 2022

by a searcher from University of British Columbia - Sauder School of Business in Vancouver, BC, Canada

I have been researching SMB acquisition financing in Canada (specifically for small deals where traditional bank financing would not be available). It is easy to find information on SBA lending in the US, such as average LTV, multiples of EBITDA/SDE, terms, etc. (largely through the many Twitter accounts in this space, and here); however, I am having trouble finding similar information for Canada.

I've looked at BDC's Business Loans for Entrepreneurs and it seems like they offer acquisition financing, but the details are not clear to me (and unless I have a deal for them to look at, I can't really get a discussion paper or something to get an idea of the terms).

I’ve also looked at the Canada Small Business Financing Program, which seems comparable to the US SBA program in that it is government-backed - but the CBSFP is only for hard assets and so I'm not sure if it can be used for SMB acquisitions. Maybe just for the portion backed by hard assets?

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Reply by a searcher
from McMaster University in Kitchener, ON, Canada
If you have a business profile that is aligned with your ideal company then reach out to BDC and ask to review it together. The business doesn't have to be the one you're buying but at least it gives BDC an idea of the businesses you're looking at. Then they'll be able to share specifics on financing options
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Reply by a lender
from University of Delhi in Toronto, ON, Canada
Hi Jason, you are correct. CBSFP is only for hard assets. I have structured multiple cashflow loans in the small/mid market space with EBITDA ranging between $0.5-2 MM . We can connect and I can share some thoughts on usual metrics lenders looks at.
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