For searchers in Canada

October 14, 2021

by a searcher from Aston University in Houston, TX, USA

I have been exchanging with the office of the person who was my MP when I lived in Canada about expanding the SMB federally-guaranteed loan program to line up with the US's SBA 7(a) terms. The Library of Parliament's representative stated that, for a federal project/program to be created, one must submit a proposal for a pilot project and a request to thereafter create a law for it to be adopted and implemented.

Currently, there are programs that cover limited funding options through the big 5 banks and BDC offers some financing to SMB acquisitions as well. Moreover, for Quebec-based businesses, Investissement Quebec offers up to 65% LTV on small acquisitions in specific cases.

I would like to know if there are members who would find it interesting to submit the pilot project request to the government of Canada so if we can expand searcher opportunities for Canadians and Canada-based businesses looking for an exit.

Feel free to reach out, even if it is to tell me how bad of an idea it is!

Cheers,

EDIT: to anyone who is interested in being kept up to date or participating in the process, please DM me your email and I will email you all once I have the lay of the land. Also, the new government has named a new minister for SMB, so this may be a good time to create the petition.

Reply by an intermediary
from Ryerson University in Toronto, ON, Canada

I would be very interested in learning more. BTW, the credit default %s out of the US SBA program are incredibly low, it may be helpful to reference those stats to communicate that while loan guarantees are seen as risky, historically investors in the lower mid-market are very prudent and it has been a very profitable program for the US. Please reach out if you need some reference material from the sell-side perspective redacted this would be a huge step forward in helping business owners transition their companies. Good luck!

Reply by an intermediary
from McMaster University in Toronto, ON, Canada

Hi Aldo, Have you explored the recent government initiative that offers a 5-year, 0% interest working capital loan of up to $100K? This loan is provided by BDC (Business Development Bank of Canada) through a federal program led by ISED (Innovation, Science and Economic Development Canada). It's an excellent opportunity to secure funding and could be beneficial to your business.

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