Looking for help structuring/financing an 800k deal in Canada

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by a searcher
in Toronto, ON, Canada

1yr ago

Looking for help structuring/financing an 800k deal in Canada

I have found a business that is in the same industry as I am from (Photography studio). I feel like I understand almost every aspect of what the owner does on the day to day. Very good fit. Stable revenue. 20 minutes from my house. Purchase price is $redacted - $redactedEBITDA (3x). I have 80k liquid. Net worth is probably double that. I want to submit an LOI but I want to make sure that the seller note contributes to the downpayment OR I have a way of coming up with a higher down payment to make the bank happy, as I hear that 10% is generally not enough in Canada. What are my options for financing this?

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reply by a professional 1yr ago
from Bentley College in Miami, FL, USA

I'm not an expert but here are a few options: - Bank Financing: Most Canadian lenders want 20–30% down. Your $80K alone may not be enough, but... - Seller Financing: You can negotiate a seller note (e.g. $200K) that counts toward your equity — many (not all) banks will accept this. - BDC or CSBFP: BDC offers flexible acquisition loans. CSBFP is useful too, but only for asset-heavy deals (not goodwill). A sample structure that could work: $80K (you) + $200K (seller note) + $530K (loan). Start by confirming with lenders if they’ll accept the seller note as part of your down payment. If you want professional help with deal structuring or due diligence, DueDilio can connect you with experienced vendors.

reply by a searcher 1yr ago
in Toronto, ON, Canada

Yeah that’s what I’ve heard. For it to be counted as a “down payment” it would be interest only for 5 years. I’m not sure what the seller would think of that