Looking For That ‘ How To’ In Business Acquisition Loan Finance ?

OVERVIEW – Information on available financing for buying a business in Canada . What issues affect finance success

Financing for a business purchase in Canada has some entrepreneurs, business owners and other professionals wondering if there is perhaps a secret book of rules Financing For Buying A Business In Canadato success in this aspect of Canadian business financing. We’re claiming to have a copy of that publication, so let’s dig in!

One key issue in all the work that goes into purchasing an existing business (or even a franchise) in the Canadian marketplace is the necessity to start the financing strategy of your purchase well in advance of any final formal undertaking or offer you might make.

While the current business credit markets are certainly much better than they were post 2008 – 2009 recession one key issue is the amount of personal equity or down payment required by any bank or other commercial lender. (Yes there are non bank options for financing your business!)

Typical sources of financing for buying a business in Canada include:

Canadian chartered banks

The government crown corporation bank

The Canadian govt (via the govt guaranteed Small business loan)

Commercial finance companies

Asset based lenders (this might include an equipment leasing /refinancing component)

At the higher end of the food chain are private equity groups and VC’s Financing For Buying A Business In Canadawhich arent really our focus in today’s discussion – primarily because they are equity players, not debt/loans/asset monetization

It is though important for business owners/entrepreneurs to understand the key difference in a debt versus equity final solution – that being simply that any equity financing you could come up with dilutes your ownership and often control in the business

When people source home and personal financing they encounter the recommendation by many to get ‘ pre – qualified ‘. This suggestion carries over well into buying a business, as its key, just as it is in your personal financial situation, to demonstrate asset, cash flow, and information on the company/business. Knowing the amount you need to borrow to run, operate and grow the business is also key. This type of business opportunity always requires a contingency plan, as Murphy’s Law is well known in business! (What can go wrong … will)!

Assessing on going working capital needs is critical also. We have met and worked with many clients who made that proverbial follow up call (we’ve hit a cash flow crunch -help!)

While there might be a all inclusive ‘ how to ‘ in buying an existing business or franchise in Canada it might be well considered to seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you unlock some of those secret rules to business purchase success.


Author: Stan Prokop – 7 Park Avenue Financial :


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 :


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