Lending service access for a buyer who is not a citizen of Canada

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

1yr ago

Lending service access for a buyer who is not a citizen of Canada

Does anyone has any idea if there are any restrictions in accessing lending services from Canadian Banks and other financial institutions when the buyer is not a Canadian citizen.

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reply by a searcher 1yr ago
from University of Teesside in Toronto, ON, Canada

I agree with 1st and 3rd, do not agree with the 2nd one though as it makes no sense to give personal guarantee except in case of SBA (US), Business itself is a guarantee. If the cash flow covers the debt service, I don't think why the lending sevices want the collateral (hard assets), which is very hard come by in service industry.

If the banks agree to service the debt with collateral, then the need for personal guarantee is of the table.

I agree that the CAD banks are more conservative, hence the return on the business also similar to that.

reply by a searcher 1yr ago
from University of Toronto in Toronto, ON, Canada

^redacted‌ I really appreciate your perspectives and agree with all of your suggestions.

The personal guarantee is relevant to the risk in the business and to the cash-flows. If you buy an ongoing concern that’s been profitable and significantly so the business can hold up the debt but with buying franchises or startup service business (to your point) the lack of assets makes it harder for the bank to use the business as only collateral. Speaking to my experience in private and pubco ownership of a tech company but others might have had a different experience than mine.

I find the above is magnified when you are buying a business with a weak corporate credit score and your personal credit score is from outside the country either (like me) a Canadian looking for US financing or a non-Canadian looking for Canadian financing.

Maybe someone can describe their experience in similar contexts?