May 2009 - Richard Conley, Adam Hassett & Ian Longshaw


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Entrepreneurs First - BDC Consulting

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  • Risk sharing : Allows you to provide more for your clients without having to take on risks that you deem too big.
  • Criteria for Working Capital (general) Not only an experienced management team but a solid profit history Projected sales growth and good profit potential Review engagement or audited year-end financial statements -------------------------------------------------------------------------------------------------------- SUPPLEMENTARY NOTES TO HELP YOU ANSWERING QUESTIONS Innovation Financing (max. $250K) Finance the growth of the business and development & implementation of innovation strategies Eligible businesses in all industry sectors Eligible projects examples: Management / staff training & development Adoption of industry standards Purchase of new technologies Marketing plans or development of export markets Working capital: to sustain activities or replenish W/C depleted by capital expenditures Fixed assets: leasehold improvements & specialized assets Change of ownership : all including MBIs/MBOs, refinancing of vendor take back if the VTB is the result of a prior change of ownership. Repayment period = 8 years Term debt to equity ratio: not exceed 4.1 when total commitment for authorization = or less than $150K and 3:1 if more than $150K.
  • Company needs : increased inventory for a greater demand from clients and addition of new clients. Solutions offered : increase line of credit in addition to BDC financing to bridge the gap in needs.
  • For clients whose company is growing and that want to: maintain cash flow, increase production, increase sales and profits. --------------------------------------------------------------------------------------------------------- SUPPLEMENTARY NOTES TO HELP YOU ANSWERING QUESTIONS PRODUCTIVITY PLUS LOAN (Max. $5M) Manufacturing & processing sectors Businesses in operation for at least 1 full year Refinancing : if it’s to obtain full control of fixed assets Working capital : replenish W/C depleted by the purchase (during the last fiscal year) Real Estate : could include a real estate component, which must represent less than 50% of the project
  • Repayment period: 12 years Security : Pari passu loan agreement with another institution. First mortgage on financed assets. RLV 40 %.
  • Repayment period: 12 years Security : Pari passu loan agreement with another institution. First mortgage on financed assets. RLV 40 %.
  • Business ownership transition: Creation of succession plan: Choosing the right successor, planning the transfer of expertise, Family businesses: assisting with internal conflicts and confusion
  • SR&ED: Scientific Research and Experimental Development tax credit program
  • May 2009 - Richard Conley, Adam Hassett & Ian Longshaw

    1. 1. Presented to: Fraser Valley C.A. Association By: Richard Conley, Ian Longshaw & Adam Hassett
    2. 2. BDC Profile <ul><li>Our mission: ‘Entrepreneurs First’ </li></ul><ul><li>(To assist and support successful Canadian business’) </li></ul><ul><ul><li>Long-term financial solutions for every stage of growth </li></ul></ul><ul><ul><li>The BDC Team offers: </li></ul></ul><ul><ul><ul><li>Existing Business Financing </li></ul></ul></ul><ul><ul><ul><li>Change of Ownership Financing </li></ul></ul></ul><ul><ul><ul><li>Consulting Services </li></ul></ul></ul><ul><ul><ul><li>Subordinate Financing (mezzanine) </li></ul></ul></ul><ul><ul><ul><li>Venture Capital Financing </li></ul></ul></ul>
    3. 3. Complementary services <ul><li>Risk sharing: to help provide additional support to businesses </li></ul><ul><li>A complementary offer: Long-term financing for additional working capital and acquisition needs. </li></ul><ul><li>BDC does not provide: </li></ul><ul><ul><li>Bank accounts </li></ul></ul><ul><ul><li>Term deposits or investment certificates </li></ul></ul><ul><ul><li>Sale of RRSPs, insurance </li></ul></ul><ul><ul><li>Lines of Credit </li></ul></ul><ul><ul><li>Equipment leasing </li></ul></ul><ul><ul><li>Residential or non-commercial loans </li></ul></ul>
    4. 4. <ul><li>Benefit from our focus in these markets: </li></ul><ul><ul><li>Manufacturing and transformation </li></ul></ul><ul><ul><li>Exporters </li></ul></ul><ul><ul><li>Knowledge-based industries </li></ul></ul><ul><ul><li>Wholesalers / distributors </li></ul></ul><ul><ul><li>Construction </li></ul></ul><ul><ul><li>Business services </li></ul></ul><ul><li>BDC does not provide financing: </li></ul><ul><ul><li>To bars, nightclubs, gambling operations, activities of a sexual nature, privates clubs </li></ul></ul><ul><ul><li>To non-Canadian businesses </li></ul></ul><ul><ul><li>To companies that are in default of environmental regulations </li></ul></ul><ul><ul><li>and do not want to comply </li></ul></ul>A complementary partner in key markets
    5. 5. Working Capital <ul><li>Financing possibilities: </li></ul><ul><li>Increase inventory to boost sales and receivables </li></ul><ul><li>Replenish working capital depleted by capital expenditures </li></ul><ul><li>Explore new export markets or develop products </li></ul><ul><li>Criteria for financing: </li></ul><ul><li>An existing Line of Credit </li></ul><ul><li>An experienced management team </li></ul>
    6. 6. Working Capital Financing Example Manufacturer in business 2 years. 100% sales growth. <ul><li>Benefits: </li></ul><ul><li>Support current operations and reduce pressure on account receivables. </li></ul>Project Financing Purchase of Inventory $250,000 BDC Working Capital $250,000 Total $250,000 Total $250,000
    7. 7. Equipment Financing <ul><li>Objective: Helping your clients improve productivity </li></ul><ul><li>Financing possibilities: </li></ul><ul><li>Purchasing equipment (new or used) up to 125% </li></ul><ul><li>Purchasing a production line or automating current one </li></ul><ul><li>How BDC can help you protect your client’s cash flow? </li></ul><ul><li>Long-term financing up to $5,000,000 </li></ul><ul><li>Additional working capital (up to 25% of the equipment cost) to cover soft costs (training, transportation, etc.) </li></ul><ul><li>Repayment period of up to 12 years </li></ul>
    8. 8. Equipment Financing Example 1 <ul><li>Secured by: GSA with first charge on the programmed equipment </li></ul>Project Financing Purchase Equipment $1,000,000 BDC $1,250,000 Soft Costs/Training 250,000 Total $250,000 Total $250,000
    9. 9. Equipment Financing Example 2 Benefits: <ul><li>Higher percentage of financing for your client </li></ul><ul><li>Growth supported by the partnership of 2 financial institutions. </li></ul>Food manufacturer in business since 1 977. 175 employees and $ 64 M in S ales. Project Financing Purchase Equipment $6,000,000 BDC (pari passu) $3,350,000 Installation 700,000 Clients Bank (pari passu) 3,350,000 Total $6,700,000 Total $6,700,000
    10. 10. Land & Building Financing <ul><li>Financing possibilities: </li></ul><ul><ul><li>Purchase of land and building </li></ul></ul><ul><ul><li>Expansion or improvement of existing premises </li></ul></ul><ul><ul><li>Construction of new premises </li></ul></ul><ul><li>How can BDC help you to offer more? </li></ul><ul><ul><li>Non-demand long-term financing up to 30 years to help protect cash flow </li></ul></ul><ul><ul><li>Progressive or seasonal repayment options tailored to your client business' cash flow </li></ul></ul>
    11. 11. Land & Building Financing Example <ul><li>Industry: Metal Fabrication </li></ul><ul><li>Term Debt to Equity = 3.5 to 1 </li></ul><ul><li>Good personal credit history </li></ul><ul><li>Security: mortgage & personal guarantee </li></ul><ul><li>Principal is experienced in industry </li></ul>Project Financing Purchase Strata Unit $480,000 BDC $360,000 S/H Injection 120,000 Total $480,000 Total $480,000
    12. 12. <ul><li>Increasing a company’s value while reducing costs </li></ul><ul><li>Operational efficiency – Helps your clients reduce waste/inefficiencies, improve profitability and become more competitive. </li></ul><ul><ul><li>Increased productivity (15% to 35%) </li></ul></ul><ul><ul><li>Improved quality control and reduction of costs (10% to 30%) </li></ul></ul><ul><ul><li>Reduced inventory (30% to 80%) </li></ul></ul><ul><ul><li>Reduced setup time (30% to 90%) </li></ul></ul><ul><li>Quality (ISO, HACCP) - Certification </li></ul><ul><ul><li>ISO 9001 : 2000 (quality management) </li></ul></ul><ul><ul><li>ISO 14000 (environmental) </li></ul></ul><ul><ul><li>HACCP ( Hazard Analysis Critical Control Point ) for the agribusiness sector </li></ul></ul>BDC Consulting
    13. 13. A vision to ensure continuity <ul><li>Strategic/business planning </li></ul><ul><ul><li>Positioning the company in the market </li></ul></ul><ul><ul><li>Setting future objectives and the resources needed to get there </li></ul></ul><ul><li>HR management </li></ul><ul><ul><li>Recruiting, training, retaining the right people </li></ul></ul><ul><li>Business ownership transition </li></ul><ul><ul><li>Creation of a succession plan </li></ul></ul><ul><ul><li>Family businesses </li></ul></ul>BDC Consulting
    14. 14. Growth via development and innovation <ul><li>Marketing and sales </li></ul><ul><ul><li>Analysis of market and competition </li></ul></ul><ul><ul><li>Marketing plan and promotion </li></ul></ul><ul><ul><li>Sales strategy </li></ul></ul><ul><li>Exporting </li></ul><ul><ul><li>Training on promising markets </li></ul></ul><ul><ul><li>Export strategy and plan </li></ul></ul><ul><li>SR&ED tax credits </li></ul><ul><ul><li>Assessing eligibility and preparing tax credit application </li></ul></ul>BDC Consulting
    15. 15. Thank you