BDC Capital — Growth & Transition Capital — Buying a business
Canada
Funding for entrepreneurs to buy an established business
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|noCondition
grant_single|deadlines
- grant_single|openingDateJune 27, 2022
grant_single|financingType
Loans and Capital investments
grant_single|eligibleIndustries
- grant_single|allIndustries
grant_single|grantors
- Business Development Bank of Canada (BDC)
- Government of Canada
grant_single|status
grant_card_status|open
grant_single_labels|preview
Get repayable financial support of up to $35 million to increase your working capital to buy a competitor's or supplier's business. You can also obtain guidance and support from a team of experienced professionals to help you find the optimal financing st
grant_single_labels|projects
grant_single|admissibleProjectsExample
$5,000,000
Acquisition of healthcare provider facilities
$2,500,000
Merger with a financial cooperative
$3,000,000
Purchase and integration of a key supplier's operations
$3,500,000
Purchase of a tech startup business
$3,000,000
Acquisition of an agricultural supplier business
grant_single_labels|admissibility
Eligibility for accessing Growth & Transition Capital for business acquisitions is determined by certain criteria related to the business and proposed financing model.
- The business involved in the acquisition project must be established or in a high-growth phase.
- The business must possess a strong management team.
- There must be a demonstration of quality financial reporting.
- The company targeted in the acquisition must have a consistent track record of positive and strong cash flow.
grant_eligibility_criteria|who_can_apply
Eligible companies for this grant are typically established or high-growth businesses with a strong management team and quality financial reporting.
- Established or high-growth businesses
- Strong management team
- Quality financial reporting
grant_eligibility_criteria|eligible_expenses
This grant is designed to support business acquisition projects by providing customized financing solutions that align with the buyer's growth strategy. Eligible activities focus on leveraging growth and transition capital to facilitate strategic acquisitions by minimizing ownership dilution.
- Financing acquisition of established or high-growth businesses with strong management and robust financial reporting.
- Utilization of mezzanine financing to cover goodwill and bridge financial gaps between various sources.
- Applying cash flow financing for acquisitions of companies demonstrating consistent positive cash flow results.
grant_eligibility_criteria|zone
The grant covers expenses related to business acquisitions and growth, with a focus on customizing financing solutions to meet specific needs.
- Financing the goodwill component of the business acquisition transaction.
- Repayment structuring tailored to cash inflows to protect cash flow.
- Bridge financing between other financing sources like senior debt and equity.
- Capital for business acquisition with stable terms and conditions.
grant_single_labels|criteria
There are evaluation and selection criteria for this grant. The criteria include:
- The business is established or high-growth
- Has a strong management team
- Demonstrates quality of financial reporting
grant_single_labels|register
Here are the steps to submit an application for the Venture Capital and Growth & Transition Capital financing solutions:
- Step 1: Assess Eligibility
- Review the financing solutions offered to determine if your business acquisition project is eligible based on criteria such as being an established or high-growth business, having a strong management team, and demonstrating quality financial reporting.
- Step 2: Prepare Financial Proposal
- Work with Growth & Transition Capital experts to develop a feasible and beneficial financial package suited to your needs.
- Include details on the funding amount required, which can range from $250,000 to $35M.
- Outline your preferred financing solution, either Mezzanine financing or Cash flow financing, based on your specific project requirements.
- Step 3: Detailed Financial Documentation
- Compile necessary financial documents demonstrating the business’s consistent track record of positive cash flow if opting for cash flow financing.
- Prepare any additional supporting documentation that outlines the financial health and potential of your acquisition target.
- Step 4: Online Application Submission
- Access the online application portal via the financing service provider’s website.
- Complete the application form providing all requested information related to your business and the acquisition project.
- Upload your detailed financial proposal and any supporting documentation.
- Submit the completed application ensuring all sections are filled in accurately.
- Step 5: Await Confirmation and Follow-Up
- Receive confirmation of your application submission, including any application reference number for tracking purposes.
- Follow up as needed for any additional information or documentation requested by the financing team.
grant_single_labels|otherInfo
Here are additional relevant details for this grant:
- Customized mezzanine financing is available to protect working capital.
- Capital payments can be postponed for the first 12 months, aiding cash flow management.
- Repayment terms can be aligned with the company's cash inflows, including options such as balloon payments and cash flow sweeps.
- The security of loans is subordinated, providing more borrowing power.
- No involvement in business management from lenders, allowing current management to retain control.
- Financing solutions range from $250,000 to $35 million.
Apply to this program
Unlock Growth Opportunities with Tailored Capital Financing
This financing solution empowers entrepreneurs to acquire businesses and execute growth strategies without diluting ownership. Structurally flexible, it accommodates repayment based on cash inflows, safeguarding operational cash flow and providing leverage power through subordinated security.
In-Depth Insights into Financing Solutions for Business Acquisition
In the dynamic world of business acquisitions, having access to adequate financing is crucial for entrepreneurial success and market expansion. The Growth & Transition Capital financing solution offers a bespoke approach to raising capital, artfully catering to businesses looking to acquire new ventures. Whether you're eyeing a competitor or a supplier, this financing model bridges the gap left by traditional lending, which often relies heavily on tangible assets.
One of the standout features of this solution is its ability to let entrepreneurs maintain full control over their ventures by avoiding equity dilution. This is particularly advantageous for entrepreneurs poised to enter new markets or expand their footprint but reluctant to sacrifice ownership stakes. By granting access to cash flow financing for businesses with proven consistent positive cash flows, entrepreneurs can take advantage of stable repayment terms that align with their revenue streams.
Mezzanine financing, a highlight of this offering, provides a tiered spotlight on structuring financial commitments. It affords the borrower unprecedented flexibility in tailoring repayment schedules. This strategy protects working capital and allows for strategic resource allocation, essential for the fluid nature of business acquisitions.
The financing amounts range from $250,000 to $35 million, providing a sizeable capital base adaptable across various scales of business transactions. Contextualize this with the option to defer capital payments for the initial 12 months, and business owners find themselves in a strong position to realign their financial strategies post-acquisition, optimizing early-stage cash flow management.
Moreover, knowledge of the industry and market dynamics is crucial. This is where the expertise of Growth & Transition Capital financial advisors comes into play. Their aid in tailoring the financial package honed towards the exact needs of the acquisition significantly fills the strategic gap, turning potential challenges into avenues for growth.
What truly encapsulates the value of this capital financing is the strategic advantage it offers in terms of subordinated security to secured lenders. This increases borrowers' borrowing capacities without further encumbering the operational dynamics. Thus, while businesses position themselves in competitive markets, their ability to maneuver financially without consolidation hurdles becomes a pivotal growth factor.
In conclusion, the benefits derived from these tailored financing solutions not only provide the necessary funds to carry out business transactions but also empower business owners to focus on expedient growth opportunities. With its structured support in place, the Growth & Transition Capital solution is adept at fostering an entrepreneurial culture of growth, continuity, and sustainable market presence.
