How Are Searchers In Ontario Handling "personal Guarantees" For Senior Debt Financing?

HOW ARE SEARCHERS IN ONTARIO HANDLING "PERSONAL GUARANTEES" FOR SENIOR DEBT FINANCING?

Hello! I am early in my journey right now and looking to connect with someone who has completed a deal through the search fund model who is based in Ontario, Canada. One of the main questions I have is landing debt financing in Ontario. I understand the equity side a little bit better, but would love to learn from someone who has gone through the process. Specifically, I am curious about how people are handling the "personal guarantees" when it comes to senior debt financing in Canada. Does BDC offer senior debt? Any of the major Canadian banks? I am motivated to launch a Search Fund once I have a clearer picture of the debt side of the process..

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admin Massachusetts Institute of Technology - MIT Sloan School of Management Taylor University Stanford University - Graduate School of Business - 01/08/2021

^[redacted]‌ - In addition to the comments you receive here you can always find Searchers by geography under the Directory tab at the top of this page. Here is the direct link: https://www.searchfunder.com/user/map/searcher.

Tagging a few Searchfunders in Ontario who may be in a position to help answer this question: ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌ , ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌,^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, ^[redacted]‌, (To our friends in Ontario, THANK YOU in advance for helping to make Searchfunder a collaborative community. Too few of you are taking advantage of our recent integration with IBISWorld Canada. You can now download up to 50 reports a month under the Industries tab at the top of this screen. Here is the direct link: www.searchfunder.com/ibisworld?country=124. With Best Wishes, ^[redacted]‌).

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searcher Indian Institute of Management Bangalore Indian Institute of Technology, Bombay - 01/08/2021

Hi ^[redacted]‌, I’m also early in the process but from having spoken to a few investors, the big banks are willing to lend against cash flow (2-3x) and at least as per investors, they’ve been able to do away with PGs. I’m not aware of what BDC offers in practice.

searcher University of Toronto University of Toronto - Joseph L. Rotman School of Management McGill University SDA Bocconi - School of Management - 01/08/2021

^[redacted]‌ - We won't consider a bank term sheet if there are personal guarantees. Most Canadian banks are okay with no personal guarantees from what we've seen, but it likely depends on which industry and financial profile of the business. Happy to introduce you to a few of our banking contacts.

like reply | 2 likes

searcher University of Toronto - Joseph L. Rotman School of Management McMaster University - 01/08/2021

^^[redacted]‌ and ^[redacted]‌ - Thanks for your insights. I would definitely take you up on the contacts Sheret! I will call you for that chat soon.

investor Ivey Business School at Western University - 01/08/2021

Hi ^Shobhit Shanker‌, - I've recently completed a search fund exit in Ontario and have lots of experience dealing with the Canadian lending environment. Happy to chat further if helpful. Send me a message with your email and we can follow up.

like reply | 1 like

Hi Bruce. Thanks for the insightful comment. I sent you a LinkedIn invite with my email so looking forward to connecting there!

investor University of Western Ontario University of Toronto Ivey Business School at Western University - 01/08/2021

It depends who provides your equity but typically you’d just say “no”.

HOW ARE SEARCHERS IN ONTARIO HANDLING "PERSONAL GUARANTEES" FOR SENIOR DEBT FINANCING?

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