Frequently Asked Questions

What does my business need to qualify for First West Capital financing?

Cash flow sufficient to service the proposed facility, a sustainable competitive advantage and an experienced management team. Learn about our Investment Criteria

How does First West Capital work with my bank?

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.

How is First West Capital financing structured?

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.

In what provinces does First West Capital provide funding?

We provide financing across Canada.

What is the difference between sub-debt and mezzanine financing?

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

Learn more about sub-debt and mezzanine financing

How does preferred equity work, and how is it different from sub-debt or mezzanine financing?

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.

Does First West Capital take a board seat?

In cases where preferred equity is part of the financing solution, yes, First West Capital will be represented on the Board of Directors.

How much can we borrow?

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.

How much does First West Capital financing cost?

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.

Does First West Capital offer fixed rates?

Yes, rates can be fixed or variable.

I don’t own 100% of the company – will I still qualify for a loan?

Yes, but the facility would need to be approved by the majority of the shareholders and we require a postponement from all shareholders.

Does First West Capital finance start-up companies?

First West Capital selectively considers emerging and expanding companies for financing, however, we generally do not finance brand new companies.

Does First West Capital provide construction financing?

Yes, but only for owner-occupied real estate.

Does First West Capital provide financing for personal mortgages?

No. We provide financing for owner-occupied commercial and industrial real estate only.

Does First West Capital do U.S.-based deals?

First West Capital’s market service area is limited to North America, with a focus on Canadian borrower and investee clients.

What is the process for getting financing?

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.

How long does it take to obtain 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.

Can we repay early?

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.

What information should I prepare to maximize my chances of obtaining financing?

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

Need more information? Contact us and we'd be happy to discuss your financing needs.

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