Quebec Business Transfer Fund
QC, Canada
Loan for buyers in Quebec
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|fromMinToMax
grant_single|deadlines
- grant_single|openingDateJuly 28, 2022
grant_single|financingType
Loans and Capital investments
Expert Advice
grant_single|eligibleIndustries
- grant_single|allIndustries
grant_single|grantors
- Centre de tranfer d'entreprise du Québec (CTEQ)
grant_single|status
grant_card_status|open
grant_single_labels|preview
Get specific business transfer funding to promote entrepreneurial growth and succession of existing businesses.
grant_single_labels|projects
The grant is aimed at enabling the transfer of Québec-based enterprises by providing advantageous financial conditions and expert guidance for new entrepreneurs taking over an existing business. Eligible activities focus on the acquisition of businesses where there is a change in control, excluding real estate and agricultural land transactions.
- Acquisition of a Québec-based company by individuals or management teams.
- Internal buyout by management or family members.
- External buyout by individuals or groups of individuals.
- Strategic acquisition by investors.
grant_single|admissibleProjectsExample
$266,666
Vancouver
Internal buyout of a family-run bookstore by next-generation family members
$366,666
Ottawa
Acquisition of a local art gallery by an art enthusiast
$666,666
Montreal
Acquisition of a local bakery chain by a management team
$453,333
Halifax
External buyout of a fitness center by a group of health enthusiasts
$1,000,000
Calgary
Strategic acquisition of a logistics company by a group of investors
$500,000
Toronto
Acquisition of an eco-friendly cleaning product manufacturer by a new entrepreneur
grant_single_labels|admissibility
Eligibility criteria for the grant ensure that only Quebec-based enterprises and participating individuals meet specific requirements for financing and involvement.
- Eligible businesses must be Quebec-based with their headquarters in Quebec, a majority of their management and employees residing in Quebec, and primary activities conducted in Quebec.
- Excluded sectors include real estate and agricultural land acquisition.
- Eligible applicants are individuals, their management companies, or the business being succeeded.
- The transaction must involve a change of control in a Quebec business.
- The deal must include participation from Investissement Québec or the Fonds de solidarité FTQ, either directly or through an associated entity, contributing as a lender or investor.
- The successor must commit to working full-time in the targeted business and invest a minimum of $50,000.
grant_eligibility_criteria|who_can_apply
Yes, there are eligible types of companies for this grant. Only companies established in Quebec that meet specific criteria are eligible.
- The company must be a Quebec-based corporation or limited partnership, private or public.
- The majority of the management team must reside in Quebec.
- The majority of the employees must reside in Quebec.
- The main management and operational activities must be carried out in Quebec.
- Excludes real estate sectors and transactions involving the acquisition of farmland.
grant_eligibility_criteria|who_cannot_apply
The grant context does specify types of companies that are not eligible for this grant. Specifically, companies in the following sectors are excluded:
- Real estate
- Agricultural land acquisition
grant_eligibility_criteria|eligible_expenses
There are eligible expenses for this grant. The Fonds de transfert d’entreprise du Québec allows the repreneur to obtain a term loan equivalent to two dollars for every dollar invested in capital, with a minimum of $50,000 and a maximum of $500,000. In cases where multiple releveurs join for an acquisition, a maximum amount of $1,000,000 could be allocated.
- Term loan for the repreneur
- Minimum investment of $50,000
- Maximum loan amount of $500,000 (or $1,000,000 for multiple releveurs)
grant_eligibility_criteria|zone
The eligible geographic zones for this grant are restricted to the province of Quebec, Canada. Only companies with their main operations, management, and the majority of employees based in Quebec are eligible.
- Must be located in the province of Quebec
- Headquarters must be in Quebec
- Majority of management must reside in Quebec
- Majority of employees must reside in Quebec
- Main business operations must be conducted in Quebec
grant_single_labels|criteria
A summary of evaluation and selection criteria applicable for this grant involves the eligibility of Quebecois enterprises and a mandatory participation of either Investissement Québec or the Fonds de solidarité FTQ. Additionally, specific financial commitments from the releveur are needed.
- Only Quebecois enterprises are eligible, defined as those with headquarters, majority of management, employees, and operations based in Quebec.
- No real estate or farmland transactions are allowed.
- Participants must be individuals, their management company, or the relevant enterprise.
- The transaction must involve a change in control within the enterprise.
- Investissement Québec or Fonds de solidarité FTQ must participate in financing as either lenders or investors.
- The releveur must commit to working full-time in the enterprise.
- A minimum personal investment of $50,000 by the releveur is required.
- The Quebec Transfer Business Fund provides a loan of two dollars for each dollar contributed by the releveur, subject to minimum and maximum limits.
grant_single_labels|register
- Step 1: Determine Eligibility
- Ensure the business is a Québec-based company meeting all criteria.
- Verify that the potential releveur (buyer) meets the minimum requirements, including the commitment to work full-time at the acquired enterprise and the ability to inject a minimum of $50,000.
- Step 2: Contact Funds Partners
- Reach out to Investissement Québec or Fonds de solidarité FTQ to verify their participation in the financing.
- Step 3: Prepare Documentation
- Gather business details, financial statements, legal documents, releveur's financials, and any other required documentation.
- Step 4: Submit Application
- Submit an application per guidelines provided, ensuring all conditions of admissibility are met and documentation is complete.
- Step 5: Follow Up and Review
- Coordinate with relevant organizations during the review process and provide any additional information requested.
- Step 6: Funding Decision
- Await and respond to the decision made by the funding partners.
- Step 7: Finalize Agreements
- If approved, finalize all loan or investment agreements as detailed in the policies, including borrowing terms and repayment structures.
Apply to this program
Summary of the Fonds de Transfert d'Entreprise du Québec (FTEQ)
The Fonds de Transfert d'Entreprise du Québec (FTEQ) aims to facilitate the smooth transition and acquisition of Quebec-based businesses by providing advantageous financial terms and expert advice. It targets both prospective business owners and retiring sellers, ensuring the continuity and growth of Quebec enterprises.
Understanding the Fonds de Transfert d'Entreprise du Québec (FTEQ)
The economic landscape of Quebec, much like other parts of Canada, is undergoing notable transitions. With a growing wave of retirement among business owners and an equally ambitious cohort of entrepreneurs ready to take the helm, the need for smooth and sustainable business transitions has never been more pronounced. To address this, the Fonds de Transfert d'Entreprise du Québec (FTEQ) stands as a bridge by facilitating business transfers under exceptionally advantageous terms. This comprehensive guide will delve into what the FTEQ offers, its objectives, eligibility criteria, and why it is a crucial asset in Quebec's entrepreneurial ecosystem.
Objectives of the Fonds de Transfert d'Entreprise du Québec (FTEQ)
The primary goal of the FTEQ is to foster the growth of entrepreneurship in Quebec by creating a conducive environment for business transfers. Several underlying objectives drive this overarching goal:
- Ensure Continuity: The FTEQ aims to maintain the viability and continuity of Quebec-based businesses through streamlined transfers.
- Support Aspiring Entrepreneurs: By providing favorable financial conditions and expert guidance, the FTEQ supports new entrepreneurs in their pursuit of acquiring existing businesses.
- Promote Regional Development: The fund ensures that businesses across all regions of Quebec can benefit from its offerings, thus promoting widespread economic development.
- Enhance Employment: By facilitating successful business transfers, the fund aids in preserving and potentially increasing employment within the province.
Eligibility Criteria for the Fund
The FTEQ imposes several eligibility requirements to ensure that the fund is utilized effectively and for its intended purpose:
- Quebec-Based Enterprises: Only businesses that are headquartered in Quebec, with the majority of management and employees residing within the province, are eligible. The companies must also conduct their primary operations in Quebec.
- Exclusion of Specific Sectors: The fund excludes certain sectors such as real estate and transactions involving the acquisition of agricultural land to ensure focus on other critical industries.
- Change of Control: The transaction must involve a change of control within the enterprise. This change can be through internal sales (to family members or existing managers) or external sales (to new entrepreneurs or strategic investors).
- Participation of Partner Funds: The involvement of either Investissement Québec or the Fonds de solidarité FTQ is mandatory, ensuring a robust support network and financial backing for the transaction.
- Commitment of the Releveu: The new business owner or 'releveur' must commit to working full-time within the acquired business and is required to invest a minimum amount of $50,000.
Financial Structure and Terms
The FTEQ provides a structured financial framework to support business transfers. Below are the essential components:
- Capitalization and Contribution: The fund has a total capitalization of $20 million, supported equally by the Fonds du développement économique du Québec and the Fonds de solidarité FTQ.
- Investment Matching: For every dollar the new business owner invests, the FTEQ will contribute up to two dollars as a term loan. The minimum loan amount is $100,000, with a maximum of $500,000 per individual. If multiple new owners are involved, the ceiling can go up to $1,000,000.
- Interest Rates: The interest rates are pegged to the Québec bond rate for a seven-year term, with an additional premium of 3.25%. The minimum applicable interest rate is 6.50%.
- Repayment Terms: The loan’s principal and interest are repayable monthly. A moratorium on capital repayment may be permitted for up to 24 months, extendable to 36 months with a slight interest rate hike of 0.50%. The total loan term does not exceed 84 months.
Types of Transactions Supported by the FTEQ
The FTEQ is versatile, catering to various transaction types that facilitate the transfer of business ownership:
- Family Succession: This involves the business being transferred within the family, ensuring that the enterprise remains under the same familial management.
- Internal Sales: Existing management or employees within the company purchase and take over the business operations. This scenario is often ideal as the new owners are already familiar with the business dynamics.
- External Sales: Individuals or groups from outside the organization purchase the business. This can bring fresh perspectives and drive innovation.
- Strategic Investors: Investment groups or strategic partners acquire the business to merge it with their existing operations, potentially accelerating growth.
Conclusion
The Fonds de Transfert d'Entreprise du Québec (FTEQ) is an invaluable asset in Quebec's entrepreneurial landscape. It not only addresses the critical need for smooth business transitions but also fortifies the province's economic resilience by supporting the next generation of business leaders. With its favorable financial terms, expert guidance, and comprehensive support system, the FTEQ ensures that Quebec's businesses can thrive through generations, contributing to the broader goals of economic sustainability and growth.
