Is it possible to get debt financing for a content business in Canada?

searcher profile

October 31, 2024

by a searcher from University of Waterloo in Toronto, ON, Canada

I am looking at a few deals which generate revenue from affiliate marketing. I am curious if anybody has been able to secure debt financing from a schedule A lender in Canada for any such deals?

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commentor profile
Reply by a professional
from Bishop's University in Moncton, NB, Canada
The CSBFA program allows for up to $150,000 of financing for goodwill and intangibles. You could access this from a big 6 bank and some seller financing. Expect them to insist on no more than a 3:1 debt:equity ratio on the opening balance sheet.

The key here is that everyone will have trouble financing it so the sellers will either have to finance part of the deal or find an American buyer who ***may*** be able to convince a US lender to use an SBA7a loan to move the business to the US. (assuming it's not a specifically Canadian kind of business)
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Reply by a searcher
from Queens University in Toronto, ON, Canada
This would be a straight cash flow deal unless the affiliate relationships are some form of recurring revenue. Even then there's a lot of nuance. Best to chat with a commercial banker with experience in financing deals within the digital space to review this specific business. If there's no reliable way to forecast the cash flows in a way that instills confidence in the stability of the business for several years out, you're facing an uphill battle.
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