DEL — Business Acquisition Loan
At a glance
- Max. $150,000
- Up to 50% of project cost
- Open Date : July 9, 2024
- All industries
Overview
The Business Acquisition Loan supports entrepreneurs intending to acquire at least 25% of an existing business with the goal of executing a takeover within 5 years. Eligible activities include purchasing shares, acquiring business assets, and covering professional service fees related to the acquisition. The loan offers up to $150,000 with flexible repayment options, including term or equity loans, "excess cash flow" loans, and debentures.
Activities funded
Eligibility
This grant aims to support entrepreneurs in acquiring an existing business, requiring them to meet several eligibility criteria to qualify for financial assistance. The applicant must work full-time in the business and possess a significant stake of at least 25% with relevant experience and training.
- Be legally constituted
- Be located in the DEL region or plan to be
- Operate in an eligible industry and offer value-added services or products generally intended for businesses (B2B)
- Submit a project that involves acquiring a business with the intention of taking it over and that will help create and/or maintain jobs
- Own at least 25% of the business and work there full-time
- Have experience and training that is relevant to the project
- Submit a project for which government financing and DEL financing combined cover a maximum of 50% of the project expenses
- Demonstrate that the project is based on realistic financial forecasts demonstrating profitability and growth potential
- Provide current financial statements showing 20% equity after the project and ability to repay
- Demonstrate that the business and entrepreneur are not in default to the government or its creditors, nor are they the subject of any litigation
Who is eligible?
Eligible companies for this grant must be legally constituted and located in the DEL region or plan to be, and they must operate in eligible industries that provide value-added services or products generally intended for businesses (B2B). The proposed project must involve acquiring a business with the intention of taking it over and must demonstrate profitability and growth potential.
- Legally constituted companies
- Located in the DEL region or planning to be
- Operate in eligible industries offering B2B value-added services or products
- Submitting a project involving the acquisition and takeover of a business
- Demonstrate profitability and growth potential in financial forecasts
Eligible expenses
Eligible expenses for this grant include costs associated with acquiring a business and professional service fees related to the acquisition transaction.
- Cost of purchasing shares of the business (voting shares or units)
- Expenses related to purchasing a business’s assets
- Professional service fees related to the acquisition transaction
Selection criteria
The grant for business acquisition through DEL has specific evaluation and selection criteria to ensure that the project aligns with the purpose of supporting entrepreneurs in acquiring a business with the intention of taking over. These criteria include legal constitution, location, industry eligibility, project viability, and other prerequisites.
- Be legally constituted
- Be located in the DEL region or plan to be
- Operate in an eligible industry and offer value-added services or products generally intended for businesses (B2B)
- Submit a project that involves acquiring a business with the intention of taking it over and that will help create and/or maintain jobs
- Own at least 25% of the business and work there full-time
- Have experience and training that is relevant to the project
- Submit a project for which government financing and DEL financing combined cover a maximum of 50% of the project expenses
- Demonstrate that the project is based on realistic financial forecasts demonstrating profitability and growth potential
- Provide current financial statements showing 20% equity after the project and ability to repay
- Demonstrate that the business and entrepreneur are not in default to the government or its creditors, nor are they the subject of any litigation
How to apply
Ensure eligibility
- Be legally constituted
- Be located in the DEL region or plan to be
- Operate in an eligible industry (B2B)
- Own at least 25% of the company and work full-time
- Submit a project involving the acquisition of a business with job creation/maintenance
- Relevant experience and training
Gather the key documents
- Company market assessment report
- Property transfer agreement
- Financial statements for the last 3 years and the current year
- Opening balance sheet
- Projected financial forecasts for the next 2 years
- Buyer profile including personal financial statement and credit report
- Business model and revenue model or business plan
Submit the financial forecasts
- Submit realistic financial forecasts showing profitability and growth potential
- Ensure that combined government funding and IF funding cover a maximum of 50% of project expenses
- Provide recent financial statements showing 20% equity after the project
Demonstrate conformity
- Ensure that there are no defaults with the government or creditors
- Show that there are no ongoing disputes involving the company or the entrepreneur
Submit the request
- Submit all gathered documents and forecasts
- Ensure that all criteria and implications are met
Make an appointment with DEL
Additional information
There are some miscellaneous information about the Business Acquisition Loan.
- Repayment terms offer flexibility with different structuring options available.
- The loan is repayable at any time without penalty.
- Collateral might be required depending on the type of financing.
- The interest rate is competitive and risk-based.
- Key documents needed include market valuation report and transfer agreements.
- The business and entrepreneur must not be in default to the government or its creditors.
- The project should help create and/or maintain jobs.