Debt financing advisory for Alberta businesses

Most owners approach one lender — usually their existing bank — and take the terms they’re offered. That’s a reasonable instinct and an expensive one. A single lender has one credit box, one appetite, and no competitive pressure to sharpen pricing or loosen covenants.

I run a structured process instead. I build the credit story, take it to the lenders most likely to want it, and negotiate the terms against each other. You stay focused on the business.

Most engagements involve facilities between $1 million and $10 million, though I’ve advised on transactions well above that range.

When owners call

• The bank has declined a request, or approved it at terms that don’t work
• A covenant has been breached, or is about to be
• Growth has outrun the operating line and working capital is tight
• Equipment or a facility needs financing and the quotes vary wildly
• An existing facility is maturing and the renewal terms have moved
• A lender has moved the file to special loans or asked for a forbearance agreement

If you’re in that last one, call sooner rather than later. The options available in week two are meaningfully better than the options available in month four. I’ve taken a company out of a special loans group before — the timeline matters more than almost anything else.

How the process works

1. Credit assessment. I look at your financials the way an adjudicator will — cash flow coverage, leverage, collateral position, customer concentration, quality of earnings. You hear where the file is weak from me before you hear it from a lender.

2. Fix what’s fixable. Some weaknesses are presentation problems. Some are real and need to be addressed or explained. Either way, you go to market with the story already handled instead of improvising on a call.

3. Build the package. A financial model with a defensible forecast, a request memorandum, and the supporting schedules underwriting will ask for. This is the part most owners underestimate, and it’s the part that most determines the answer.

4. Approach the market. I go to the lenders whose credit appetite actually fits your situation, in parallel, not one at a time.

5. Negotiate. Pricing matters less than owners expect. Covenant headroom, amortization, security, personal guarantees, and cash sweep provisions matter more. I negotiate all of it.

6. Close and monitor. I manage due diligence through to funding, and stay available afterward for covenant reporting and lender relationship management.

The Alberta lending landscape

There are more sources of capital than most owners realize, and they behave very differently:

• Chartered banks — cheapest money, tightest boxes, least tolerance for a messy year
• ATB Financial and Servus Credit Union — Alberta-based, often more willing to underwrite the story behind the numbers
• BDC — longer amortizations, will lend against goodwill and intangibles, frequently sits behind or alongside a bank
• Asset-based lenders — lend against receivables, inventory, and equipment rather than cash flow; useful when EBITDA is temporarily impaired
• Private credit and mezzanine — more expensive, far more flexible on covenants and structure
• The Canada Small Business Financing Program — government-guaranteed, currently up to $1.15 million per borrower, delivered through participating banks and credit unions

The right answer is usually a structure combining two of these, not the best single quote.

What I don’t do

I’m not a broker taking a spread from lenders, and I don’t have a lending product to sell you. I’m paid by you, which is the only way the advice stays clean.

I also decline work regularly. If your situation is a straightforward equipment loan your bank will approve on Tuesday, you don’t need me and I’ll say so.

Frequently asked questions

What size of financing do you work on? Most engagements involve facilities between $1 million and $10 million. Below that, the fee rarely justifies the process for either of us. Above it, I’ve run larger mandates and am happy to discuss.

How long does it take? For a clean file with current financials, generally four to eight weeks from engagement to term sheet, then another four to six weeks to funding. Distressed or complex situations take longer. The biggest variable is how quickly we can assemble accurate historical financials — companies with tidy books move considerably faster.

What does it cost? Financing mandates are typically a work fee plus a success fee payable on funding, priced to the size and complexity of the deal. Ongoing CFO engagements are a monthly retainer, generally starting at $5,000. You get a written fee proposal before you commit to anything, and the first conversation is free.

My bank already said no. Is it too late? No — that’s a common starting point. A decline usually reflects that lender’s credit box, not your creditworthiness. It does mean we need to understand precisely why, because that shapes where the file goes next.

Will I have to give a personal guarantee? Often, yes — most lenders in this size range require one. What’s negotiable is the amount, the conditions for release, and whether it’s joint and several among shareholders. That negotiation is worth having.

Do you work outside Edmonton? Yes, throughout Alberta. If you’re in the Edmonton metro area I’d rather meet in person. Elsewhere, I work virtually and travel when the engagement warrants it.

Related

If your financing need is tied to a transaction, see shareholder buyout financing or acquisition financing.

Talk to me

If you’re weighing a financing decision, a first conversation costs nothing and is confidential.

Book a 30-minute call · (780) 884-0171 · cpham@phectorcapital.com