OVERVIEW – Purchasing or buying a business isn’t just for BIG business . Understand your acquisition and financing methods and options if you’re buying an existing company
Company acquisition financing methods & options are the method by which Canadian business owners/mgrs successfully complete the pursuit of a desired business purchase. Things go awry when the right expertise and finance terms are not achieved. What are essential points and strategies to successfully complete buying a company? Let’s dig in.
One of the larger mistakes purchasers make is to focus solely on the ‘ price / value ‘ of the company you are looking at. The reality is that financial statements that accountants prepare never are intended to figure out the ‘ value ‘ ‘ price ‘ of the company. (They do however hopefully reflect the profits and assets of the business)
Successfully getting financing approved and in place to purchase a business is a well known challenge. Larger corporations of course use the capital markets, the deep pockets of public ‘cash rich’ companies, or Private Equity firms to facilitate a transaction. The SME sector demands a lot more creativity but still offers some solid options for achieving your goal.
The key options to finance your business purchase will probably include one of the following:
The Govt of Canada Guaranteed Small Business Loan – (The ‘ SBL ‘)
Asset based Loans & Lines of Credit
Unsecured Cash Flow Loans
Vendor / Seller Participation in the Transaction
Mezzanine finance which typically also comes with a small equity participation request
Also, in many cases strategies that include equipment financing and leasebacks and A/R finance may well round out a transaction
Don’t forget that in almost all instances some level of owner equity participation will be desired by almost all lenders.
While Canadian chartered banks of course facilitate these transactions their lending criteria has been modified and somewhat tightened since the global 2008 financial collapse.
The key issues in business purchase finance? They are: profits, cash flow, assets, and debt levels. Those 4 criteria will determine the amount and type of financing you need.
Your ability to successfully buy an existing company will come down to the amount of time and expertise you have in ensuring you have explored the right financing options. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in completing your business purchase.
Stan Prokop – founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – Completed in excess of 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info & Contact Details :
7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS ACQUISITION FINANCE EXPERTISE
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Direct Line = 905 302 4171
Office = 905 829 2653
Fax = 905 829 2653
‘ Canadian Business Financing with the intelligent use of experience ‘
ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
7 Park Avenue Financial
Canadian Business Financing