Frequently Asked Questions
Cash flow sufficient to service the proposed facility, a sustainable competitive advantage and an experienced management team. Learn about our Investment Criteria
We collaborate with you and your bank when your business has financing requirements that exceed traditional financing options. Learn more about how we work with our partners.
We have a range of different financing solutions available ranging from subordinated debt, mezzanine financing and preferred equity, all with different payment and security options. Learn more about the features of our financing.
We provide financing across Canada.
They are both term loans that are secured in second position and rely on positive cash flow rather than collateral to repay the loan. However, mezzanine financing structures include an equity or quasi-equity bonus in the return requirements. It is used instead of preferred or common equity in the following situations:
- Companies seeking a non-amortising or partly amortising term facility
- Earlier stage businesses where positive cash flow is expected in the near future
- In transactions where the buyer’s equity is low
Preferred equity is patient, long term capital that grows with the value of the company. Unlike private equity, it can be bought back by the company using a redemption option.
In cases where preferred equity is part of the financing solution, yes, First West Capital will be represented on the Board of Directors.
Funding ranges from $500,000 to $7 million, with a total client connection loan limit of $10 million. The total loan amount invested is determined by the business’ ability to service debt, its growth potential, the degree of flexibility and patience required, and the level of leverage the business can support.
Interest rates can range between 10%-16% depending on the level of risk. Generally speaking, the more security you can provide, the lower the interest rate will be. Returns on mezzanine transactions are supplemented through participatory features including equity and quasi-equity. Preferred equity pays dividends and the exit value depends on the value of the company.
Yes, rates can be fixed or variable.
Yes, but the facility would need to be approved by the majority of the shareholders and we require a postponement from all shareholders.
First West Capital selectively considers emerging and expanding companies for financing, however, we generally do not finance brand new companies.
Yes, but only for owner-occupied real estate.
No. We provide financing for owner-occupied commercial and industrial real estate only.
We work across all industries in Canada. Read more about the types of clients we work with.
First West Capital’s market service area is limited to North America, with a focus on Canadian borrower and investee clients.
Steps to obtain financing include an initial meeting and qualification, issuing an interest letter, due diligence, approval and funding. Learn more about the steps to financing.
It can be as quick as one month when a client can provide timely responses on the interest letter and our due diligence requirements.
Yes, debt facilities can be repaid at any time upon payment of a penalty. Preferred equity and equity sweeteners may be bought out at fair market value once all debts have been repaid.
After an initial meeting, we’ll need to see historical financial statements, a business plan and financial projections. If we proceed to a due diligence process, we’ll request additional details. Download an indicative Due Diligence Checklist