From 16 Years in Corporate to a $1m SDE Acquisition

The various banks offered like a slightly different flavor, but they all similarly came back with similar terms. Okay. majority of them uh and this is this is before you know we chose one that that gave us the the the ask basically everything that we wanted um but the majority of the other ones um we probably could have pushed on it uh a bit more uh this is part of that negotiation that uh we…

included a five-year amortization for a few of them. The one that I landed with was offering a seven-year, so not too far off from a 10, which is nice. that's not guaranteed.

Yeah.

That's great. Yeah, it is great. So maybe that is a good thing over here in Canada. But I would argue, though, that... the rate isn't gonna move the needle uh the terms that the amortization terms is gonna if you can get a 10 and i have a high interest rate i think the math works out that you're still better off from a debt servicing perspective

I take your point that the bigger needle mover is amortization than rate, but certainly rate matters. I mean, so many searchers were, have been stung and in fact, literally driven out of business because of the interest rate hikes that we've seen over the last couple of years. What it did to their SBA loan was material to the point of making their business unviable.

So, Obviously, it depends on what the change in rate is. So if it's just a point, it might not matter so much, but rates have gone up much more, moved much more than a single point in the last couple of years. So very interesting.

Okay, Jesus, thank you for all of that transparency. That's wonderful and hopefully helpful, not only to Canadians, but to anybody who's not working with an SBA. Anything to say about...

The cross nature of this that hasn't already been said. So we should say the entity is Canadian. I know this from the pre-call.

The entity is, you know... domiciled in Canada with a sort of American subsidiary, but it's basically, but it's a purely Canadian business that you bought that is the, you know, a hundred percent owner of an American subsidiary, correct? That's the structure, the business?

Correct. So, so is there any kind of anything to say about the fact that the business operates in two countries?

Yeah, so a big part of the due diligence, and I incurred, I'd say, significant amount of transaction costs, was the fact that there were two jurisdictions involved. So two sets of books, two versions of tax due diligence, having to kind of... convert everything over into one currency.