Alberta bound

Pro Builders owner Paul McCann needed a financing partner that fit his business and growth plans

With four established Home Hardware Building Centre locations throughout the Okanagan, Pro Builders owner Paul McCann was looking to expand. However, before he could launch his growth plans he needed to find the right financing partner.

“I wanted to grow my business,” explains Paul. “I’ve got four stores in the Okanagan, but I wanted to expand into new markets. My first step was an existing lumber store in Canmore, Alberta. I felt that would provide a base for future growth across eastern B.C. and western Alberta.”

Of course, growing a business requires significant financing. And, while Penticton-based Pro Builders has proven cash flows and a suite of senior lending products, Paul saw a need for additional funding, in the form of subordinated debt financing.

First West Capital—a strategic financing partner

“I have a good mix of traditional lending products,” says Paul. “However, the Canmore acquisition represented a good opportunity to build a relationship with a new partner early in my expansion plans—a strategic partner that understood what I was trying to do with the company and was well suited to helping me achieve my vision”

That new partner is First West Capital—a partner that will allow Pro Builders to diversify its base of lending providers and help ensure future funding requirements are met.

“It was easy working with Paul because he has clear growth plans and knows how he wants to achieve his goal,” says First West Capital’s Kristi Miller. “After going through his business plan and visiting his stores in the Okanagan, we were able to put together a deal not only for his Canmore acquisition, but one that could be used to finance further expansion. With such a solid business plan, we were confident we were making a good investment with Paul.”

Funding expansions with subordinated debt

Subordinated debt is often used as a financing method for growing businesses with proven cash flows. In some cases, like with Pro Builders, subordinated debt is used to acquire an existing business. For younger companies, it’s used to fund growth when the business doesn’t yet qualify for a traditional commercial loan. And for others, it’s used to enable a succession.

Sub-debt provides funding for business growth, without dilution or loss of control associated with equity financing.

Subordinated debt is financing secured in second position (second in terms of payback priority) and generally attracts a higher interest rate than senior debt (traditional borrowing) due to the higher levels of associated risk.

The First West Capital advantage

First West Capital provides:

• Innovative and flexible subordinated debt solutions;
• A client-centered approach that results in exceptional service; and
• Responsive, firm and clear commitments that allow you to get on with what you do best—run your business.