How do Canadian lenders treat VTB (seller note) as equity?

by a searcher from University of Toronto - Joseph L. Rotman School of Management

9 months ago

Hi searchers,
I am a self-funded searcher in my early stages. In my initial discussions with some Canadian lenders, they seem to consider VTB as equity only if it's structured with a 5-year interest-only period and a balloon payment at the end. However, I am curious about i) the flexibility that exists regarding this criteria and ii) which lenders are more flexible. 

Thanks in advance for sharing your experiences.
Luis

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13 comments

searcher from University of Toronto - Joseph L. Rotman School of Management

Appreciate the helpful insights from everyone!

4 months ago | like reply | 0 likes

searcher from Harvard University

Everything is covered well here in the responses. One key point irrespective of note being considered as equity you will still need to cash inject equity in Canadian transactions, unlike US transactions where it is not mandatory if seller rolls in equity/note is treated as equity.

5 months ago | like reply | 0 likes

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