Unique expertise within reach
B USINESS ACQUISITION SOCCA leads the way and helps you make your business project happen • Non-refundable contribution (ABDP grant) • Term loan • Coaching 2
Our Clientele • First Nations – Abenaki – Algonquin – Atikamekw – Cree – Huron-Wendat – Malecite – Micmac 3
Analysis process Financial statements • Is the business profitable? • What’s the tendency during the last three years (sales, profits)?; • Evaluating assets (detailed list of what is included in the sale); • Quality of the financial statements; Discussion with the seller • Why is the seller selling? • Is there a hidden problem? • Is the industrie heading for a cliff?; • Are the customers likely to slip away to competitors? 4
Analysis process Products and services • History of the business activities (integration of new products and services) ? • What works well and what needs to be improved? Market and competition • Exclusive agreement with active suppliers/buyers? • New competitors? Industry • What’s the tendency (decline, new regulations)? 5
Analysis process Management • Stability of important managers • Can the seller be easily replaced? Operations • Key employees ? • Know-how transfer 6
Studies prior to acquisition Professional appraiser • The appraiser will determine the value of the business’s assets (inventory, land, building, equipment) • Permits financial institutions to determine the maximum loan amount depending of the assets value (collaterals) Chartered business valuator (CBV) • The CBV will determine the fair market value • Goodwill may be considered as an eligible cost of the business acquisition, when it is supported by the business valuation. • The ABDP will only consider the project eligible when the agreed purchase price is within the range specified in the business valuation. 7
Studies prior to acquisition Environmental assessment (if necessary) • Phase 1 study • Phase 2 study Business plan • Why is it requested? • Financial forecast (3 years) 8
Our Products and Services (non-refundable contribution) For the completion of the following activities: • Start-up, acquisition or expansion of a business • Implementation of marketing activities • Business support (coaching, accounting, etc.) • Development of a business plan and feasibility studies (assessments, environmental studies, etc.) 9
Our Products and Services (non-refundable contribution) Eligibility criteria • Be – A First Nation – A member of a First Nation – A corporation owned by a First Nation or by one of their members • Have the necessary financial resources (equity: 10% minimum of the cost of the project) • Present a viable business project • Have experience and training in the field of activities • Mandatory full-time involvement in the business • Operate a business not involved in the following sectors of activity (gambling, sex, alcohol, tobacco) • Have a good credit rating (see example) 10
Our products and services (non-refundable contribution) Maximum contribution • For a private project, up to $99,999 • For a community project (band council), up to $1 million 11
Our products and services (non-refundable contribution) Contribution level Project cost Contribution rate Development of a business plan, Up to 75% marketing plan or feasibilities studies Start-up, acquisition or expansion of a Up to 40% business Implementation of marketing activities Up to 60% Project-related management Up to 75% Professional advisory services after the Up to 75% business is launched (accountant or other) 12
Our products and services (term loan) To achieve the following activities: •Start-up •Acquisition •Expansion 13
Our products and services (term loan) Characteristics • The amount of the loan is determined by the borrower’s repayment capacity • The value of guarantees offered must be sufficient to reasonably cover the amount borrowed For example: Building and land Up to 70% Equipment Up to 70% Inventory Up to 50% Working capital 0 % 14
Our products and services (term loan) Equity required • Minimum 10% of the total cost of the project • The transfer of assets may be considered as equity Interest rates • Competitive and comparable to other traditional financial institutions • Based on the risk associated with the project Duration • Based on the lifespan of the asset • Up to 25 years 15
Different financing possibilities Non-refundable contribution programs • Aboriginal business development program (ABDP) • Secrétariat aux affaires autochtones (SAA) Loans • Aboriginal financial institutions (AFIs) • Any other traditional financial institutions Personal equity • Minimum 10% of the total project cost Sale price balance from the seller 16
Our products and services To apply for financing you must provide us with the following: Application for financing • Personal balance sheet • Applicant’s declaration • Résumé • Proof of Aboriginal ancestry (copy of the Indian Status card) • Business plan (if already prepared) • For an existing business Financial statements for the last three years • Recent interim financial statements • Governing documents of the business • Ownership agreement (where applicable) • IMPORTANT: No expenses incurred prior to approval of your file will be considered eligible in the calculation of the non-refundable contribution. 17
Contact Us • Head Office 2936, rue de la Faune, Suite 200 Wendake (Québec) G0A 4V0 Telephone: 418 842-0972 Toll free: 1 800 241-0972 Fax: 418 842-8925 18
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