In Canada, companies with limited tangible assets have difficulty securing financing to fuel their growth. This situation is particularly dire for companies looking for $1 – 15M in funding. Equity can be hard to come by or is highly dilutive and generally, banks cannot move beyond their well-defined credit parameters. That’s why we created a private debt offering to serve the financing needs of these companies.
Access to private debt can lead to significant transformation, including a string of successful acquisitions or strong organic growth after selling a great product. This funding can set the stage for reducing the overall cost of capital and minimizing dilution while positioning your organization for a significant liquidity event or notable up-round in the future.
Few debt providers understand or are flexible enough to support and transform the growth trajectory of mid-market entrepreneurs. We are a resourceful lender, bridging the gap between traditional banks and expensive equity, putting non-dilutive capital to work in promising businesses.
what we look for
Annual revenues of $3M or greater, with growth above the sector average, or high-margin MRR of at least $150 thousand. Recurring, repeating, or long-term contract-based revenue models with low customer churn.
- High visibility into cash flows
Exceptional forecasting with deep insights into the future of the business and its cash flow. If cash flow is negative, there should be recurring or repeatable revenues to support working capital burn.
Sector-agnostic, but excluding mining, life sciences, and oil & gas extractions.
- Enterprise value
Business value in an M&A context can be readily substantiated. An equity sponsor is not required.
Strong operators with ‘skin in the game’. Proven entrepreneurs with a strong understanding of their business.
Must have a headquarters in Canada.
- Use of funds
Generally for growth (acquisitions, working capital, etc.), dividend recapitalizations, or specialty finance situations.
- Loan size
$1M to $15M hold (will syndicate up to $50M).
12 to 48 months.
Interest rate >10%; Upside: warrants, equity kickers, or bonuses.
- Security ranking
First position, or second position behind a line of credit/bank debt.
Flexible: capital can be made available on closing, or in multiple tranches tied to growth milestones.
- Principal repayment
Tailored to growth strategy, e.g. deferral of principal payments for up to length of term, large bullet payment at end of term, seasonality adjustments.