How the AFO engagement actually runs.

The five phases

From first call to closed facility.

The engagement runs the same shape on every deal. The first call decides whether to proceed; phases 2 through 5 produce the actual transaction. The CPA leads throughout — there is no handoff between the structuring team and the negotiation team.

1. Phase 1

   First call & triage

   The engagement starts with a twenty-minute conversation. We want to understand the use of proceeds, the rough size of the ask, where the business sits today, and the timeline the owner is working toward. We're not trying to sell anything on this call — we're trying to figure out whether AFO is the right answer at all.

   Some businesses come out of this call with a clear next step that doesn't involve us: CSBFP via the existing bank, an EDC working-capital facility, an SR&ED claim the existing CPA can prep. When that's the answer, we say so. The engagement starts when there's a structural conversation that warrants a CPA — a stack to design, a coverage package to build, a non-standard structure to evaluate.

   Deliverables

   • Plain-English summary of where AFO would help (or wouldn't)
   • If proceeding: an engagement letter scoped to the specific deal
   • A target timeline aligned with the owner's go-live date

   Typical timeline

   Same week

   Common pitfalls

   • Bringing the wrong question — "what's the best rate" instead of "what's the right structure"
   • Skipping the call to send an email summary; the right questions don't surface on email

2. Phase 2

   Structure the ask

   Before any provider hears about the deal, we structure it. The CPA looks at the use of proceeds, the existing balance sheet, the three-year projection, and the coverage headroom to determine which instrument fits — or which stack of instruments fits. Sometimes it's a clean answer ("conventional senior, $3M, 5-year amortization"); sometimes it's a layered one ("CSBFP for the equipment slice, conventional senior for the working-capital revolver, SR&ED claim alongside").

   The structuring is where the value of having a CPA on this side of the conversation shows up. Brokers are paid on placement, so they take the first credible deal back to a lender and try to close it. We model the alternatives and pick the structure that actually fits the business, even when it takes longer.

   Deliverables

   • Structuring memo — instruments, providers to target, expected pricing band
   • Coverage analysis showing the proposed leverage against historical and projected EBITDA
   • Sensitivity: what happens to coverage if revenue is 10% / 20% below plan

   Typical timeline

   1–2 weeks

   Common pitfalls

   • Approaching providers before this analysis is done — burns reputation when the package isn't ready
   • Over-engineering the structure when a simpler answer would close cleanly

3. Phase 3

   Build the package

   The package is what gets sent to the lender, grant program, or alternative provider. It contains normalized historical financials (3-5 years, with adjustments documented), a projection model with the assumptions visible, the coverage analysis from phase 2, a management discussion of the business, and any program-specific narrative (eligibility narrative for grants, project description for SR&ED, collateral schedule for ABL).

   Building the package well is the difference between a credit committee that engages with the deal and one that throws it on the pile. Most owner-operator businesses don't have the package built out — which is why first-time conversations stall on "send us the financials" rather than progressing to a term sheet.

   Deliverables

   • Normalized 3–5-year historical financials (Books integration where available)
   • 3-year projection model with documented driver assumptions
   • Coverage analysis + leverage stack modelling
   • Provider-ready presentation deck (executive summary, financials, management)
   • Program-specific narrative (grant eligibility, SR&ED technical, etc.) where applicable

   Typical timeline

   2–4 weeks

   Common pitfalls

   • Working from a single Excel file that hasn't been reconciled to the books
   • Borrowing a stale projection from last year's planning cycle — credit committees notice

4. Phase 4

   Approach providers

   With the package built, outreach goes to the specific providers the structuring memo identified — not a mass blast. Senior debt to two or three banks where the credit-box matches; ABL to a private lender that knows the sector; grants to the agency program that fits the project; angels through the specific intros that match the business stage.

   Targeted outreach matters because the package needs to be tailored to each provider's perspective. The same deal looks different from a bank's senior-lending desk than it does from a mezzanine fund — emphasizing different terms, different sensitivities, different management talking points. We adjust the cover materials accordingly.

   Deliverables

   • Cover letter / pitch tailored per provider
   • Live deal tracker showing where each conversation stands
   • Provider questions logged and answered consistently across the slate

   Typical timeline

   3–6 weeks

   Common pitfalls

   • Sending the same generic package to every provider — most won't read it
   • Letting providers compete on rate alone instead of on structure and certainty of close

5. Phase 5

   Term sheets, negotiation, close

   Term sheets come back from the providers that are interested. The CPA reviews each clause-by-clause: covenants and the headroom they leave, pricing grid and step-up triggers, prepayment penalty, MAC clauses, guarantee scope, intercreditor terms if a stack is involved. The goal is the best available structure, not just the first one that comes back.

   Negotiation focuses on the terms that actually move the economics: covenant headroom, prepayment flexibility, guarantee removal triggers. Headline rate matters less than these structural points over the five-to-seven years the facility actually runs.

   The owner signs the term sheet, the lender's legal team drafts the definitive agreement, and the CPA reviews the final long-form documents against the term sheet to catch any drift. Closing conditions get satisfied (typically a few standard items — insurance certificates, corporate good-standing, last fiscal close-out). The facility funds.

   Deliverables

   • Term-sheet review memo with clause-by-clause analysis
   • Negotiated changes with redline tracking
   • Long-form agreement review against the executed term sheet
   • Closing checklist run to satisfied
   • Post-close: covenant tracking dashboard if the facility includes financial covenants

   Typical timeline

   2–6 weeks (term sheet to funding)

   Common pitfalls

   • Signing the term sheet with unfavourable covenants because the rate is good — the rate is the cheap part
   • Ignoring the MAC clause; it can be invoked in a downturn
   • Not negotiating burn-off triggers on personal guarantees at origination