Business Acquisitions Finance : SME Commercial Acquisitions Financing

In Canada
Ever Prayed For Acquisition Financing ?
OVEVIE! " In#ormation on $usiness acquisition #inance solutions in Canada%
Financing acquisitions in t&e SME sector requires in#ormation on sources and
met&ods o# #inancing
Business acquisition #inance solutions in Canada don't necessarily have to come with
the requirement of saying a prayer. The ability to purchase, and finance a business
requires knowledge of some fairly common sense factors coupled with expertise in some
specialized areas. nowing who to go to and what to talk about is key. !et's dig in.
Top experts tell us that acquisitions financing is such a hot topic for a couple of different
reasons " one is the eternal need of the entrepreneur to purchase and operate a business,
the other is the amount of businesses available today , particularly in the #$% sector , as
many founders&owners retire.
'nly ( question remains then " how do you finance the purchase) *hile Canadian
chartered banks can certainly pick up a good part of the slack many owners, as well as the
financial profile of the firm they are buying, simply don't meet bank requirements. #ome
statistics out of the states indicate that +,- of deals are bank re.ected. That then requires
specialized knowledge in a variety of other sources which can finance such transactions.
The one exception to bank participation in your deal is the /ovt C#01 loan program,
allowing you to finance business acquisitions to a maximum of 23,k. 4owever, that
amount, as well as some other forms of ' top up ' financing might well get the
entrepreneur on his or her way to close a deal.
5ersonal equity in the transaction is almost always a requirement in financing
acquisitions. 6mounts vary relative to the amount of capital you need and the risk profile
of the deal. 6lso factored in there will be lender perception of your management depth
and experience. 4ere's where solid concise business plans focused on cash flow and
profits make total sense.
7on't forget also that the seller can also assist in the form of a vendor take back, the '
8T0 '. *hile a lender appreciates the personal capital you are putting at risk the seller is
also at risk to a certain degree when they agree to a vendor take back. $ore often than
not they are always a positive influence on a deal.
The one thing to remember though is that in some cases a 8T0 might essentially be
viewed as additional debt you are taking on. #o that obligation must be factored into
balance sheets and cash flows in your presentation.
8enture capitalists and private equity groups finance only a small portion of businesses
for sale " primarily because these transactions are often done in only the millions and tens
of millions of dollars.
'ther solutions to finance a business acquisition include9
'nsecured cas& #lo( loans
Equi)ment #inancing
Bridge loans
Sale lease$ac*s
Asset $ased lending
!or*ing ca)ital term loans #rom Canada+s cro(n cor)oration $an*
A, #inancing
:f you're looking for solid, yet creative ways to finance a business purchase seek out and
speak to a trusted- credi$le and e.)erienced Canadian $usiness Financing Advisor
(it& a trac* record o# success who can assist you with your acquisition needs.
Stan Pro*o) " / Par* Avenue Financial :
&tt):,,(((%/)ar*avenue#inancial%com
0usiness financing for Canadian 1irms , specializing in working capital, cash flow, asset
based financing , %quipment !easing , franchise finance and Cdn. Tax Credit 1inance .
1ounded ;,,< " Completed in excess of =, $illion > of financing for Canadian
corporations . In#o ,Contact :
/ PA0 AVE1'E FI1A1CIA2 3 CA1A4IA1 B'SI1ESS AC5'IS6IO1S
FI1A1CI17 E8PE6ISE
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Stan Pro*o)