TerraListCA

Acquisition financing in Canada

How Canadian buyers actually finance a business acquisition

Most deals on TerraList close with a mix of three sources — your equity, a BDC or bank acquisition loan, and vendor take-back financing from the seller. Here's how each piece works.

A typical $600,000 acquisition

Most Canadian SMB deals are funded in three layers.

Your equity
$120,000 down payment
20%
BDC / bank loan
$390,000 acquisition financing
65%
Vendor take-back
$90,000 seller-financed note
15%

BDC Growth & Transition Loan

Canada's only bank dedicated exclusively to entrepreneurs

  • Up to $5M+ for business acquisitions
  • More flexible than traditional banks — focuses on business cash flow, not just collateral
  • Capital payments can be postponed for the first 12 months to protect cash flow
  • Available nationwide through 109 BDC business centres
Apply at bdc.caor call 1-877-232-2269

Canada Small Business Financing Program (CSBFP)

Government-backed loans through major Canadian banks

  • Backed by the Government of Canada — lower risk for lenders
  • Available through any major Canadian bank
  • Lower down payment requirements than conventional commercial loans
  • Best for trades, food service, and retail acquisitions under $500K
  • Maximum loan size $1M (real property), $500K otherwise
Program details

Vendor take-back financing

When the seller finances part of the deal

  • Common in 30–40% of Canadian SMB transactions
  • Reduces the amount you need to borrow from a bank
  • Usually 10–20% of purchase price, 3–5 year term
  • Signals seller confidence — they're betting on the business too
Vendor Take-Back Note template

Your equity contribution

Typically 15–30% of purchase price

  • Lenders need to see real skin in the game — usually 20% minimum
  • Can come from savings, home equity line of credit, or partner equity
  • Stronger equity = better loan terms and faster underwriting
  • TerraList's deal affordability calculator shows how down payment affects monthly payments
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Run your numbers

Estimate what you can afford, then start browsing real listings.

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