BDC Capital — Growth & Transition Capital — Buying a business
Highlights
This program is designed for business owners like you who are looking to grow through acquisitions. It offers customized financing solutions that can help you buy a competitor’s or supplier’s business without diluting your ownership. With financing options ranging from $250,000 to $35 million, you can secure the funds you need to expand your operations.
Key Benefits:
- Flexible Repayment Terms: Repay your loan over a period of 3 to 8 years and protect your cash flow by postponing capital payments for the first 12 months.
- Increased Borrowing Power: Security is subordinated to secured lenders, giving you more borrowing power.
- Minimal Management Involvement: Limited to no involvement in management, keeping the business in your hands.
Why This Program Stands Out:
- Mezzanine Financing: Tailored to your business needs, allowing you to structure the loan according to your cash inflows.
- Cash Flow Financing: Ideal for businesses with a strong track record of positive cash flow, providing stable terms and peace of mind.
Applying for this program is straightforward, and with the support of experienced professionals, you can find the optimal financing structure to meet your growth strategy.
Financing Details
Type of Financing: Loan
Repayment Terms and Interest Rates:
- Repay your loan over a period of 3 to 8 years.
- Postpone your capital payments for the first 12 months.
- Repayment terms are adapted to your cash inflows to protect your cash flow. Options include balloon payments, cash flow sweeps, or monthly payments tailored to your needs.
Eligible Expenses:
- Funds can be used for business acquisition projects.
- Suitable for businesses with insufficient or no tangible assets to secure conventional financing.
- Ideal for financing the goodwill component of the transaction.
Ineligible Expenses:
- Funds cannot be used for personal expenses.
- Not applicable for businesses that do not demonstrate quality financial reporting.
Fees:
- No specific fees are mentioned, but it is advisable to consult with the program administrators for detailed fee information.
Qualifications
- The business must be established or high-growth.
- The business must have a strong management team.
The business must demonstrate quality financial reporting.
Disqualifications:
- Businesses without a consistent track record of positive and strong cash flow.
Description
This program offers customized financing to help you buy a business. You can access funds ranging from $250,000 to $35 million. This financing is designed to meet your growth strategy without diluting your ownership.
Key benefits include:
- Flexible repayment terms: Repay your loan over 3 to 8 years. You can also postpone capital payments for the first 12 months.
- Protect your cash flow: Repayment terms are tailored to your cash inflows, ensuring your working capital remains intact.
- Increased borrowing power: Security is subordinated to secured lenders, allowing you more flexibility.
This program is ideal if your business is established or experiencing high growth, has a strong management team, and demonstrates quality financial reporting. It provides the financial support you need to acquire a competitor’s or supplier’s business while keeping control in your hands.
Program Steps
Gather Required Documentation: Prepare the necessary documents for your application. These may include:
- Financial statements (balance sheet, income statement, cash flow statement)
- Business plan
- Details of intended use of funds (e.g., quotes for equipment or renovation costs)
- Tax returns
- Identification documents for business owners
Complete the Application Form: Fill out the application form provided by the program. Ensure all sections are completed accurately and thoroughly.
Review Loan Terms and Conditions: Understand the terms and conditions of the loan, including interest rates, repayment schedules, and any associated fees. Make sure these terms align with your business's financial situation and goals.
Submit the Application: Submit your completed application form along with all required documentation to the appropriate financial institution or program office.
Await Application Review: The program administrators will review your application to ensure it meets all criteria. They may contact you for additional information or clarification.
Receive Approval and Loan Disbursement: If your application is approved, you will receive the loan terms for final review. Upon acceptance, the loan funds will be disbursed to your business account.
Implement the Funds: Use the loan funds as specified in your application to support your business needs, such as purchasing equipment, making leasehold improvements, or covering other approved expenses.
Maintain Compliance: Ensure you adhere to the repayment schedule and any other conditions outlined in the loan agreement. Keep thorough records of how the funds are used and maintain communication with the program administrators if any issues arise.