BDC · CSBFP · Big-six commercial · Vendor takeback
Business plan for buying a Canadian business.
Written around what Canadian acquisition lenders actually evaluate — historical financials, valuation methodology, sources of funds (buyer equity, bank, vendor takeback), and the integration plan that ties post-close operations to the projected cash flow.
Lender programs
What Canadian lenders fund.
BDC Business Purchase or Transfer Loan
Designed for acquisition files. BDC typically expects the target to have 12–24 months of operating history, a credible management transition, and a line-itemed use of funds. Tolerates more goodwill than the chartered banks on a case-by-case basis.
CSBFP for eligible assets
For acquisitions where the target's value is concentrated in eligible CSBFP categories (equipment, leasehold improvements, real estate). Intangibles — including goodwill — are capped at $150K within the CSBFP term loan.
Big-six commercial acquisition financing
For deals where the target has tangible collateral, audited historicals, and a clear management transition. Best rates available here for strong files (prime + 1–3%). Banks typically require a valuation report from a Chartered Business Valuator (CBV) for deals above ~$500K.
Vendor takeback (VTB)
Seller-financed note covering part of the purchase price — typically 10–15% of deal value per BDC guidance. Seller stays as a creditor for 3–5 years. The VTB sits behind the senior bank loan and is paid from operating cash flow.
What we write
What acquisition underwriters expect in the plan.
Acquisition plans differ structurally from start-up plans. The market opportunity is already validated by the target's history — the plan instead has to validate the deal itself: that the price is supportable, the structure is sound, and the integration won't break the cash flow.
- Target overview with historical financials. 2–3 years of audited or reviewed income statements, balance sheets, and cash flow. Customer concentration, supplier dependencies, key contracts, and any one-time items normalized out of the trailing-12-month earnings.
- Valuation methodology stated explicitly. Income-based (EBITDA multiple, typically 3–6× for Canadian small businesses), asset-based (tangible book + working capital), or market comparables. The agreed purchase price is justified against the chosen method.
- Sources of funds with line-item structure. Buyer equity, senior bank loan, vendor takeback, working capital line. Each source pegged to a dollar amount and a security position. The plan explains how the VTB (if any) is repaid from operating cash without choking the senior debt.
- Due diligence summary integrated into the plan. Findings from legal, financial, and operational due diligence — material risks identified, mitigations agreed in the purchase agreement, and how the plan reflects them.
- Goodwill financing within program limits. CSBFP intangibles capped at $150K. Big-six banks typically limit goodwill to a percentage of the deal — beyond that the borrower covers via additional equity or vendor takeback. The plan separates tangible asset value from goodwill in the purchase-price allocation.
- Integration plan with timeline. Management transition, systems and operations integration, employee retention, customer-communication plan. Most acquisition rejections trace back to a thin or missing integration plan.
- 3-year post-close projections with DSCR. Built off the target's historicals adjusted for the deal structure. DSCR ≥ 1.25× through the senior-debt term; the VTB's repayment schedule modelled separately.
How Bridge Note writes an acquisition plan
From discovery call to deal close.
Acquisition plans run 3 weeks from signed scope — longer than a standard loan plan because of the historical-financial review and valuation work. Files where the buyer arrives with target historicals and a Letter of Intent already in hand compress the timeline.
01
Discovery call (free)
30 minutes to confirm the target, purchase price, deal structure, and lender direction. Fixed quote by end of call.
02
Structured intake
60–90 minutes covering the buyer, the target's historical performance, the Letter of Intent or purchase agreement, the proposed deal structure, and any vendor takeback terms.
03
Draft + revision
7–10 business day first draft including the historical review, valuation justification, and post-close projections. One revision round included.
Buying a Canadian business? Bring it to the discovery call.
30 minutes, free, no obligation. We confirm the target, the valuation method, the lender direction, and give you a fixed quote.