Across Alberta, British Columbia, Saskatchewan and Manitoba, founders who built businesses in the 1980s and 1990s are ready to step back. The buyers are often the people who already run the company: a general manager, a child, a junior partner. They have the skills and the relationships. They rarely have the equity a bank wants to see.
The typical structure
- Senior secured loan from a private lender against the company’s assets, funding the majority of the price
- Vendor take-back financing from the seller, postponed behind the senior loan, for a meaningful portion
- Buyer equity, often modest, sometimes supported by a shareholder loan
- A planned refinance to a bank or BDC within two to three years once the transition is proven
Why the vendor’s role matters
A vendor who takes back part of the price and stays involved for a transition period signals confidence to every lender involved. We look for a vendor take-back that is subordinated in writing, a transition agreement with defined handover milestones, and non-competition terms that protect the business the buyer is paying for.
Tax and timing
Succession deals touch the lifetime capital gains exemption, share versus asset sale decisions and, in some cases, the rules for intergenerational transfers. Involve the accountant and the lawyer before the financing conversation, not after, because the structure they choose changes what a lender can secure.
Have a situation like this? Tell us about the deal and a principal will respond within two business days. Cascade lends to businesses only, in Canadian dollars, and every rate we quote is an annual rate.
