Buying an existing business is often faster and less risky than starting from scratch. But getting the money to make the purchase can be tough. The BDC Business Purchase or Transfer Loan helps Canadian entrepreneurs buy a business or take over from an existing owner. It offers long-term, flexible financing. This loan is available across Canada from the Business Development Bank of Canada (BDC) and is open to applicants.
The BDC Business Purchase or Transfer Loan gives you money to buy an existing business. It also supports ownership transfers. This includes succession planning or management buyouts. The loan is repayable, not a grant. The payment terms are matched to the cash flow of the business you are buying.
BDC focuses on small and medium-sized businesses. They often look at the big picture and work with first-time buyers or family succession deals.
Key features:
BDC does not have a strict checklist. But strong applications usually have these things in common:
Canadian business or buyer
The business you want to buy must operate in Canada.
Viable, cash-flow-positive business
BDC checks the business’s financial statements to make sure it can pay back the loan.
Buyer investment (equity)
You must invest some of your own money. This can be cash, retained earnings, or a vendor take-back.
Clear purchase agreement
You usually need a signed or almost-final letter of intent (LOI) or purchase agreement.
Management experience
If you have related industry or management experience, your application will be stronger, especially if you are a first-time buyer.
GrantHub’s eligibility matcher can help you check if this loan and other programs fit your business type, province, and industry.
There is no set maximum amount for the BDC Business Purchase or Transfer Loan. The amount you can borrow depends on:
BDC looks at each deal on its own.
Get these documents ready:
You can apply on the BDC website or talk to a BDC account manager.
BDC will review:
If BDC approves your loan, they will set repayment terms based on the business’s cash flow. Sometimes, you can combine this loan with other bank loans or vendor financing.
BDC releases the funds after all legal and closing steps are finished.
Yes. Many buyers use the BDC Business Purchase or Transfer Loan along with other types of financing, such as:
Using more than one funding source can help reduce risk and make the deal more affordable.
For more funding tips, see:
Forgetting about working capital
Don’t focus only on the purchase price. You’ll need cash to run the business after you buy it.
Weak financial projections
Make sure your forecasts are realistic and based on clear facts.
No transition plan
BDC wants to see how you will take over the business and keep things running smoothly.
Applying too late
Talk to BDC about financing early, not after you’ve made a final deal.
Q: Do I need a down payment to buy a business with BDC?
Yes. BDC expects you to put in some of your own money, such as cash or vendor take-back financing.
Q: How long does approval take?
It can take several weeks, especially for complicated deals. BDC needs time for due diligence and legal review.
Q: Is the BDC Business Purchase or Transfer Loan taxable?
No. The loan is not taxable income. But you can usually deduct the interest as a business expense.
Q: Can first-time business buyers apply?
Yes. First-time buyers can apply, especially if they have some management or industry experience.
If you are thinking about buying a business, the BDC Business Purchase or Transfer Loan could be a key part of your financing plan. GrantHub tracks hundreds of grants and loans available across Canada, making it easier to find funding that matches your business goals. You can also use GrantHub to compare programs and see which ones fit your situation best.
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