Buying a Company In Canada : Business Purchase Finance Problems Are
Solved Like This
Can Buying A Company In Canada Be Easily one ! Ac"uisi#ion Financing $%$ &'E('IE) * In+orma#ion on buying a company in Canada, These business purchase +inance solu#ions - #ips and #ricks .ill make your ac"uisi#ion success+ul Buying a company in Canada may be an easier process than you might think... if you're aware of certain financing and valuation pitfalls that many purchasors either don't know about, or worse, choose to ignore. Let's dig in. In many cases it safe to say that that amount borrowed to fund the purchase will often dictate different levels of complexity. Many businesses in Canada that are under the Million dollar range in annual revenue can actually be accomplished with the government / SBL / loan. !ere though the loan cap is " #$,$$$.$$ so that again dictates that in some cases additional financing strategies on top of that loan might be re%uired. In our experience many franchises are well suited to purchase under that #$k cap. &nd by the way the general terms and conditions of that loan are very competitive and attractive. If you are borrowing from a bank- a commercial +inance company- or even .i#h some level o+ seller par#icipa#ion ' aka ' the vendor #ake back / ( there are some solid ' top up ' financing solutions available . )hey include e"uipmen# +inancing- cash +lo. loans 0 secured and unsecured- .orking capi#al #erm loan deb#- asse# based credi# lines- and even mone#i1a#ion2s o+ S(3E research credi#s if in fact they exist on your transaction. *hile many prospective business purchasers focus on taking on debt or moneti+ing assets of the business in %uestion they often overlook the fact that a significant amount of cash +lo. can be generated by better management of company assets. ,ou would be surprised at how improving &-. turnover, turning inventory faster and managing payables better will improve cash flow. *hen buying a business study ratios of S&- Inven#ory #urns- and a4p days ou#s#anding, )hey will give you a strong sense of where there is room for improvement. /ver all this new found cash flow will limit some of the ongoing working capital you need. 0aluing the fixed assets will also maximi+e financing potential, and this is typically done via the services of a third party appraiser selected by yourself, or more commonly the lender. 1o issue in Canadian business financing could generate more discussion with your lender than the dreaded / Personal 5uaran#ee /, *hile every situation will differ it's safe to say these are negotiable to a certain extent if the overall optics of your purchase are positive. 2urchaser and seller may well wish to consider a vendor #ake back of some sorts. *hile sellers can often demand a higher purchase price in this area buyers have the comfort of knowing they have secured some additional ' financing ' with someone who is very incented for you to succeed3 )he absolute fundamentals of buying a company and arranging business purchase finance include having a solid business plan- good cash +lo. pro6ec#ions ' conservative is better3( and ensuring that in some manner you as a buyer have some personal e"ui#y in the transaction . It's the proverbial ' skin in the game'. *hen it comes to that cash flow carefully consider realistic revenue expectations and your ability to collect client receivables in a timely manner. 4uilding in the need for future asset purchases is critical also. 4oth buyers and sellers can benefit from the use of an outside advisor when it comes to actual valuation of the business. Ta7 issues around asset vs. share financing, earn outs, goodwill, etc can be complex. *ould a co5pilot help6 Consider seeking out and speaking to a #rus#ed- credible and e7perienced Canadian business Financing Advisor .i#h a #rack record o+ success who can assist you in making more complex financing issues easy to understand.. and accessible. S#an Prokop 5 8 Park Avenue Financial : h##p:44...,8parkavenue+inancial,com 4usiness financing for Canadian 7irms , speciali+ing in working capital, cash flow, asset based financing , 8%uipment Leasing , franchise finance and Cdn. )ax Credit 7inance . 7ounded 9$$: 5 Completed in excess of ;$ Million " of financing for Canadian corporations . In+o 4Con#ac# : 8 PA(9 A'E:;E FI:A:CIAL < CA:AIA: B;SI:ESS P;(C=AES FI:A:CE E>PE(TISE =ave A ?ues#ion 4Commen# &n &ur Blog &r Canadian Business Financing Al#erna#ives ! C&:TACT: 8 Park Avenue Financial <outh <heridan 8xecutive Centre 9;=$ <outh <heridan *ay <uite #$= /akville, /ntario L>? @?A irec# Line B :=> #=; @>; &++ice B ;$ A9; 9># Email < sprokopC@parkavenuefinancial.com / Canadian Business Financing )i#h The In#elligen# ;se &+ E7perience / S#an Prokop