Sellers Note in Canada

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July 25, 2023

by a searcher from Ivey Business School at Western University in Toronto, ON, Canada

I haven't come across many people who've used a sellers note to finance their acquisition in Canada and for those who did, it was <10% of the purchase price. This seems to be different than in the US where I've heard it can be up to 30% of the sale. Does anyone have any thoughts on this in the Canadian market? Thank you!

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Reply by an intermediary
from Harvard University in Fredericton, NB, Canada
Given that the US population and economy are 10x the size of Canada’s, you are more likely to hear of US acquisition details as there are simply more of them.
It doesn’t mean it’s not happening in Canada.
Some of the top 5 Canadian banks will allow seller financing to form the down payment for the buyer.
For small business that include real property, Canadian small business loans will allow up to 100% financing of the real property. You will typically see that in the 95% range though. Still a good deal for buyers.
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Reply by a searcher
from INSEAD in Toronto, ON, Canada
I am giving out EOI/LOIs with ~20% of the EV as seller note in Canada. It seems to be okay with most sellers in the present climate.
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