Module 2, Alternative Funding Options (AFO)
Conventional term loans, asset-based revolvers, equipment financing, mezzanine debt, private credit — and non-debt alternatives like government grants, refundable tax credits, revenue-based financing, royalty deals, and strategic equity. Evaluated together, structured by a CPA, sized to your business.
Start here
Two questions — amount and use of proceeds. We’ll point you at the structures and programs that fit. No personal details, no commitment. Or browse the full programs catalog.
Or browse the catalog
The screener above answers “what fits this amount and use of proceeds.” The hubs below answer the other common questions — by industry, by use, by stage of business, by curated stack of programs, by program, by head-to-head comparison, and the glossary for vocabulary. Pick the lens that matches the question.
Manufacturing, tech & SaaS, exporters, clean tech, construction & trades, professional services. Curated stacks per vertical.
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Working capital, equipment, expansion, acquisition, refinancing, MBO, real estate, R&D, export — nine real scenarios.
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Pre-revenue / startup, early-revenue, growth, established. Distinct underwriting profiles per stage of business.
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Curated combinations of programs that solve real CPA-level structuring questions — CSBFP + working capital, SR&ED + IRAP, MBO senior + mezz + vendor.
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Every program grouped by family — debt, grants & refundable tax credits, equity, alternative structures.
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Curated comparisons answering the real “X vs Y” question — CSBFP vs conventional, ABL vs factoring, SR&ED vs IRAP.
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Plain-English definitions of every term — coverage, advance rate, covenant, refundable credit, warrant coverage.
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The CSBFP program caps at $1,150,000. Conventional bank debt requires normalized financials, coverage analysis, and a package the bank can actually work with. Asset-based lending has its own eligibility rules. Mezzanine debt has its own economics. Government grants have eligibility windows and project documentation requirements. Finance brokers are paid on placement, not on whether the structure fits.
Most business owners don't know which instrument fits their situation until they've already had three lender conversations that went nowhere, or filed for a grant they don't qualify for. The CPA who does their tax return isn't necessarily the one who models leverage stacks or SR&ED claims.
The result is deals that take too long, are structured too expensively, or don't close at all, because nobody built the right package before the first conversation.
Capital Toolkit Alternative Funding Options starts with the structure: which instrument (debt or otherwise), which providers, which covenants or project criteria, modelled by a CPA before you walk into any meeting.
On the debt side
The right instrument depends on the business model, the balance sheet, the use of proceeds, and the coverage the business can carry. In many situations the answer is a stack of two.
Tier 1 · Senior
Term loans and revolving credit facilities from chartered banks, credit unions, and Schedule II lenders. Underwritten on cash-flow coverage and balance-sheet strength. $500,000 to $25,000,000. Lowest cost, tightest covenants, requires the cleanest financial presentation.
Tier 2 · Asset-Based
Revolving lines tied to eligible receivables and inventory. Equipment-specific term loans at 75–90% LTV. For working-capital-intensive businesses (distributors, manufacturers, staffing) and asset-heavy capital projects. The facility grows as the business grows.
Tier 3 · Subordinated
Second-lien, unitranche, and subordinated debt when senior capacity is exhausted. Carries a higher coupon (12–18%) and sometimes a warrant. Suited to leveraged buyouts, management buyouts, acquisition bridges, and growth capital where equity dilution is unacceptable.
On the non-debt side
Not every capital need is debt. Some businesses qualify for non-dilutive grants. Some have an R&D footprint that throws off refundable tax credits. Some have steady recurring revenue that fits revenue-based financing. The CPA evaluates which non-debt structures are available alongside the debt options before recommending the stack.
Federal (Strategic Innovation Fund, Sustainable Development Technology Canada, Regional Development Agency programs) and provincial grant programs. Non-dilutive, non-repayable, project-scoped.
SR&ED for eligible R&D activity. Provincial digital media and clean tech credits. The CPA scopes the eligible expenditure pool, files the claim, and tracks the refund.
Monthly-revenue advances repaid as a fixed percentage of future sales. Suits SaaS, e-commerce, and subscription businesses with predictable recurring revenue. No dilution, no fixed term.
Capital in exchange for a royalty on future revenue, with caps or sunset clauses. Fits product businesses with strong gross margin and a clear revenue trajectory.
For raises that don't fit the institutional PE or VC modules — angel introductions, family-office referrals, strategic-partner capital. The CPA models the dilution and the term-sheet economics.
Many real-world deals are a stack: senior debt + a refundable tax credit, or an ABL revolver + a grant for the equipment portion. The CPA designs the stack rather than picking one instrument.
For sophisticated institutional equity (priced VC rounds, mid-market PE buyouts), see the dedicated Private Equity and Venture Capital modules.
When you need it
A second location, a new production line, or a step-change in headcount. Sized on the projected cash flow from the expansion, not just the historical run rate.
Your existing debt is maturing, the rate environment has shifted, or the original structure no longer fits the business. The CPA models the new structure and negotiates the break.
Buying out a founder, admitting a management partner, or acquiring the business you've been running. Leverage stack modelled before term sheet conversations start.
Financing the purchase of a competitor, a supplier, or a tuck-in. Pro forma coverage analysis, combined-entity projections, and lender-package preparation.
A revolver tied to receivables for businesses where cash collection lags revenue. The facility breathes with the business cycle, draws up when AR builds, pays down when cash lands.
SR&ED-eligible activity, Strategic Innovation Fund grants, regional development programs. The CPA scopes the project, prepares the claim or application, and pairs it with debt where helpful.
How it works
CPA reviews the use of proceeds, the balance sheet, and the projections to determine the right instrument (debt or non-debt, or a stack), the right providers to approach, and the coverage headroom. No outreach before this analysis is done.
Normalized historical financials, a projection model, the leverage and coverage analysis (for debt) or eligibility narrative (for grants and tax credits), and a management discussion. Built to the standard providers actually work from.
Targeted outreach to the right lenders, grant programs, or alternative providers, not a mass blast. Senior, ABL, equipment, mezzanine, grants, RBF — each has a distinct audience and the package is tailored.
CPA reviews term sheets or grant agreements, models the covenant headroom or project obligations, identifies unfavourable clauses, and supports the close. The goal is the best available structure, not just the first one that comes back.
Read the full process — phases, deliverables, timelines, pitfalls
What's inside
Debt service coverage ratio modelled at the proposed facility size, with sensitivity on revenue and margin assumptions. Know the headroom before you commit.
Three to five years of CPA-normalized historical financials: one-time items removed, owner compensation adjusted, related-party transactions disclosed. The standard providers expect.
Three-year projection built on the same FP&A driver model as the rest of the platform. Revenue growth, margin, working capital, capex, all assumptions documented and auditable.
Where the deal involves multiple instruments (senior + ABL, senior + mezz, debt + grant), the full stack is modelled: total leverage, blended cost of capital, and waterfall on a wind-down.
Formatted presentation ready to send to lenders or grant programs: executive summary, historical financials, projections, coverage analysis, management biographies, collateral schedule (debt) or project scope (grants).
Clause-by-clause analysis of the term sheet or grant agreement: covenants, pricing grid, prepayment, MAC triggers, guarantee scope, milestone obligations. The CPA identifies what's non-standard before you sign anything.
Once the facility closes, the platform tracks the financial covenants (leverage ratio, fixed-charge coverage, minimum liquidity) so surprises show up in the books, not in a lender call.
If the business runs on Capital Toolkit Books, the normalized historical financials and the projections flow directly from the ledger. No separate Excel. No reconciliation.
Many facilities and grants require recurring reporting packages. The CPA runs those on the same platform (compliance certificate, financial statements, borrowing base certificate, milestone reports) on the provider's schedule.
Who it's for
You need capital beyond what the CSBFP program provides: expansion, acquisition, refinancing, MBO, or R&D-led growth. The right structure depends on your business model and your balance sheet. The CPA figures that out before any provider conversation starts.
Run your funding-advisory and debt-placement practice on the same platform as the client's books. Normalized historical financials, coverage models, grant eligibility scoping, and provider packages, built on real ledger data, not Excel files emailed back and forth.
Bring your client relationships and your provider network. The platform handles the financial package. Engagements are structured by a CPA, which means the provider meetings are more productive and the deals close faster.
Honest status
Alternative Funding Options today is delivered as a CPA-led engagement on the platform. The screening tool above routes applicants to the right program category in real time. The coverage analysis, projection model, normalized financial package, and grant eligibility scoping are platform-assisted — the CPA uses the same Books and FP&A data that's already in the platform. Specific named providers and programs get added to the screener catalog as we close deals through them.
What feeds a strong capital raise
Every lender, grant program, or alternative provider starts the same way: open the financials, check the projection, look for the CPA's name on the package. The modules below produce the inputs AFO turns into a fundable file. Engagements often run two or three of them in parallel.
Full-cycle CPA-led bookkeeping. The ledger that produces the normalized historicals every lender package starts with. Most AFO engagements either start here or have already been here.
See module →Compilation, review, audit-ready output — the standard lenders, grant programs, and equity providers expect in the package. Prepared from the live ledger, not reconstructed.
See module →Driver-based projections. The three-year forward model lenders coverage-test against, and the variance tracking that demonstrates the projection is meeting itself.
See module →Enterprise-value modelling for mezzanine and equity raises. Five methods, qualitative risk on top, defensible to a buyer or an institutional investor.
See module →Government-backed program up to $1.15M. Cheaper than every AFO structure, where it fits. The screener flags it first when the use of proceeds and the amount match.
See module →Acquisition financing, MBO leverage stacks, and buy-side or sell-side support. AFO frequently sits underneath an M&A engagement — the financing is one half of the deal.
See module →Watch
Plain-English video explainers from the Capital Toolkit YouTube channel.
Twenty-minute conversation. Bring the use of proceeds and a rough sense of your current financial position, we’ll walk through which instrument or stack fits — debt, non-debt, or both — what providers will want to see, and how long the engagement takes.
