Business acquisition financing Canada typically starts with senior debt from a bank or asset-based lender, secured against the target company's assets and cash flow. Banks are generally the lowest-cost source of capital but also the most conservative, often limiting how much they'll lend based on tangible assets and historical earnings. This is where a financing gap frequently emerges — the difference between what a bank will finance and the actual purchase price, especially for businesses with significant intangible value like customer relationships, brand, or recurring revenue.
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