Growth and transition capital (BDC)
Growth & Transition Capital is the part of BDC that offers customized financing for growth or a change of ownership. BDC says its security is subordinated to secured lenders and that the financing is designed to limit dilution of ownership.
A buyer who lacks enough tangible assets to secure conventional financing may meet this offer. For a business transfer, BDC describes mezzanine financing as an alternative that can bridge the gap between other sources such as senior debt, vendor take-back and equity. See whether BDC can finance buying a business.
How BDC describes it
- Security is subordinated to secured lenders, which BDC says gives the borrower more borrowing power.
- BDC names mezzanine financing as an option, calling it ideal for financing the goodwill component of a transaction.
- BDC says that in most cases it requires no shareholder agreement, management rights or board representative.
- BDC also offers unitranche loans that combine senior term debt and subordinated debt.
Ask BDC how its position would rank next to the senior lender, and see subordinated debt and mezzanine financing.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentGrowth & Transition Capital
- 02Business Development Bank of CanadaGovernmentCustomized financing - Growth & Transition Capital
- 03Business Development Bank of CanadaGovernmentBusiness transfer - Customized financing
- 04Business Development Bank of CanadaGovernmentWhat is subordinate financing?
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.