Top Methods To Acquire A Business In Canada Via Financing Options That Work Acquisition Loan financing

OVERVIEW – Information on acquisition loan financing in Canada. Purchasing a business can be effectively completed via a number of different solutions including leverage finance loans

 

Acquisition loan needs arise quickly when you or your firm has found the right business to purchase or merge with in Canada. Leverage finance loans and other financial solutions can provide the necessary capital to successfully conclude a business purchase. Let’s dig in.

Naturally the stage or condition in which your targeted purchase is in varies -it might be a smaller firm doing well, or a larger firm experiencing severe business challenges, not the least of which might be cash flow or profit shortages.

Buying an existing business in any condition, large or small, comes with complications. At the heart of what you need to address are key issues such as:

Valuation

Negotiation

Employee/Culture issues

And finally… FINANCING!

The risks around completing a transaction incorrectly are of course significant – including of course financial loss. However the reasons to complete a business purchase successfully are compelling – they might include:

Enhancing personal income and net worth

Acquiring business assets at an attractive price

The ability to compete more effectively in your industry

The concept of leverage finance loans is a compelling one. Although the term might mean different things to different people we’re talking here essentially about using the right type of financing and debt – in some cases more than might be typical to acquire a business. In some cases the debt you take on might be more costly than ‘ traditional’ bank debt more commonly associated with buying a business.

The good news about alternative debt and higher than normal leverage is that often it allows you to complete a transaction and then after an interim period you can ‘ re-balance ‘ the balance sheet with other forms of financing, perhaps lower cost bank loans, etc.

In some cases the debt you might take on is ‘ mezzanine ‘ in nature – secured by ‘ assets ‘ or ‘ cash flow’ with rates in the ‘ teens ‘ this appeals to smaller businesses that can’t access bank or stock market capital.

Think of your proposed transaction as having ‘ layers ‘ of financing, but always ensure that your business plan and cash flow addresses the realistic ability to repay /service the debt. A good part of any cash flow will always be going to repay debt in an acquisition – so clarity is key here.

The exact nature of whom and what you are purchasing will dictate what type of financing is needed. It might be monetizing assets through asset based loan agreements , utilizing the Govt guaranteed business loan, or cash flowing assets such as receivables, inventories, tax credits, equipment refinancing /leasing, etc.

If you’re looking to ‘ SOLVE ‘ acquisition loan needs with the right types of leverage finance loans or other financing vehicles which are ‘ time tested ‘ , while minimizing risk and maximizing opportunity consider seeking out and speaking to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with finance solutions, document issues, etc.

Author: Stan Prokop 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 – Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN ACQUISITION FINANCE AND LEVERAGE LOAN EXPERTISE

 


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