Canadian SBA Equivalent Programs
September 04, 2024
by a searcher in Toronto, ON, Canada
I've been combing through the Canadian Government Side and other resources in Canada in search of an SBA Equivalent Program. DO any of you know where I might be able to discover such a program within Canada?
from Bowling Green State University in Surrey, BC, Canada
The CSBFL is similar in the sense it's a loan guarantee program, but I believe change of ownership (ie. share sales) are not an eligible loan purpose. Generally, the CSBFL is used for purchases of equipment, leasehold improvements, stuff like that. Ironically, or maybe paradoxically, the CSBFL loan guarantees are often used by banks for start-up business lending. And further, generally start-ups in the retail F&B space.
In my opinion, would be great to see eligibility increased to include change of ownership.
The BDC is okay too - I worked there for 10 years - but small change of ownerships can sometimes fall through the cracks. Larger deals are valued and get the attention.
from Simon Fraser University in Vancouver, BC, Canada
Consider the flipside: this is an opportunity to use more seller financing. For example, I just did a deal in Canada that's 100% seller financed, citing Canada's lending climate to the seller.
The next alternative I would consider is seeking private credit from your network-- I've personally participated in these rounds and they're an effective way to get around the burden of banks' loan reporting requirements.
Anecdotally, a friend's fund made a small acquisition with a portion being a loan for an asset-heavy business. They now need 1 FTE dedicated to monthly reports demanded by the bank. Big regrets.