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Learn how Canadian companies can refinance $100M+ maturities using bank debt, private credit, ABL, asset sales and equity when banks leave a gap.
A CAD $100 million debt maturity creates a very different financing problem from an ordinary business refinance.
The company may still be profitable. It may still have valuable assets and substantial enterprise value. Its incumbent bank may even want to remain involved.
The problem is that the bank is prepared to refinance only part of the maturity.
If CAD $120 million comes due and the banking group will renew only CAD $70 million, management does not have a normal refinancing request. It has a CAD $50 million capital-stack gap that has to be solved before the maturity date.
The solution may combine senior bank debt, private credit, asset-based lending, second-lien or subordinated capital, asset monetization and new equity rather than trying to convince one institution to provide the entire amount.
Quick Answer: When Canadian banks will not fully refinance a $100 million+ debt maturity, the borrower can potentially build a replacement capital stack using retained senior bank debt, private credit, asset-based facilities, subordinated debt, asset sales or sale-leasebacks, and shareholder or institutional equity. The priority is solving both the funding gap and the next maturity before closing.
A partial renewal does not necessarily mean the underlying business is distressed.
At this size, the bank is underwriting both the company and its own exposure.
The bank may be comfortable lending CAD $60 million or CAD $80 million but unwilling to hold CAD $120 million because of leverage, sector concentration, collateral coverage, covenant performance, internal exposure limits, syndication appetite or changes in the company's earnings.
The bank may also determine that part of the existing debt no longer fits conventional senior-credit parameters.
That distinction matters.
A company with positive EBITDA, good customers and meaningful assets may still face a refinancing gap because its existing capital structure contains more debt than senior lenders currently want to hold.
BDC's guidance on refinancing similarly emphasizes examining the company's balance sheet, cash flow, debt burden and conservative forecast before determining which financing structure is appropriate.
For companies moving outside conventional bank parameters, Mehmi's guide to private credit in Canada explains how privately negotiated senior, unitranche, subordinated and special-situations financing can differ from a conventional bank facility.
Calculate the true sources-and-uses gap.
Do not start by asking a private lender for "another CAD $40 million."
Start with the entire closing requirement.
For example, assume:
The gross capital requirement is therefore CAD $130 million.
If the bank provides CAD $70 million, the actual gap is CAD $60 million, not CAD $50 million.
That difference is important because a company can technically repay the maturing debt and still fail immediately afterward if the refinance strips the business of working capital.
A proper refinancing model should therefore address:
The refinancing should solve the balance sheet, not merely wire enough money to the existing lender on maturity day.
The most practical approach is often to keep the cheapest sustainable senior capital and solve the remaining gap with different forms of capital.
A possible structure could include:
The objective is not to use every available product.
It is to determine which layer is best suited to each risk.
Senior lenders should generally finance the portion supported comfortably by recurring cash flow and high-quality collateral.
Working-capital assets may support an asset-based facility.
A temporary refinancing gap may justify bridge capital.
Higher-risk leverage may require private credit, subordinated debt or equity rather than attempting to force everything into the bank tranche.
That is why a large refinancing should be viewed as a capital-structure exercise, not a loan application.
Potentially, and this is one of the more important use cases for private credit.
Private credit providers can underwrite structures that do not fit a conventional bank's exact risk parameters, including rescue/refinancing transactions, unitranche facilities, second-lien positions and customized senior secured structures.
Mehmi's Canadian private credit guide describes rescue/refinance and special-situations lending as part of the private-credit market.
The tradeoff is usually cost and control.
A private lender filling a CAD $20 million, CAD $30 million or larger funding gap may require:
Private capital should therefore be evaluated on all-in economics, not just coupon.
As of September 2, 2026, the Bank of Canada's target overnight rate is 2.25%. That rate provides monetary-policy context, but it is not a $100M private-credit borrowing rate. Large corporate facilities are priced using the applicable benchmark, credit spread, fees, leverage, security, tenor and transaction risk.
Asset-based lending can be particularly useful when the company owns significant receivables, inventory or other financeable assets but its existing bank has sized the facility mainly from EBITDA.
BDC defines asset-based lending as financing granted primarily against the value of assets pledged as collateral.
Consider a company with:
A conventional cash-flow lender may reduce exposure because leverage has increased.
An asset-based lender may look at the same company differently because repayment protection is supported by a monitored borrowing base.
Mehmi's Asset-Based Lending Canada guide explains the broader structure, while the Canadian borrowing-base guide shows why gross receivables and inventory cannot simply be multiplied by an advertised advance rate. Aging, concentration, disputes, inventory quality and reserves reduce actual availability.
ABL can therefore replace part of an incumbent revolving facility or release a bank from carrying assets another lender is better positioned to finance.
But there is a catch.
The existing lender may already have first-ranking security over those assets.
Security priority needs to be resolved before assuming a separate ABL facility can simply be added.
Possibly, but the existing credit documents matter.
The company's current bank may have a general security agreement or other broad security covering substantially all assets. The credit agreement may also restrict additional debt or additional security.
A new lender cannot be treated as if it operates outside that structure.
The parties may need an intercreditor, priority or subordination agreement governing matters such as:
Mehmi's guide to first-lien versus second-lien bridge financing in Canada explains why existing registrations and senior-lender consent can materially change what appears to be a financeable transaction.
For a $100M+ refinancing, counsel should review the existing security structure early.
Discovering shortly before closing that the credit agreement prohibits the proposed junior facility can put the entire refinancing at risk.
Yes, but only if there is a realistic takeout.
Imagine a company has CAD $100 million due in December.
Its permanent refinancing is progressing, but a real estate disposition expected to generate CAD $25 million will not close until March.
A bridge facility may make economic sense because the company can identify a specific event expected to repay it.
That is different from using a bridge because no permanent lender is prepared to refinance the company.
Mehmi's commercial bridge loan guide explains the key credit question: what repays the bridge?
The broader Canadian bridge-loan guide makes the same distinction between a temporary timing gap and a permanent capital problem.
A $30 million bridge that becomes a $30 million unresolved maturity twelve months later has not fixed the refinancing problem.
It has moved it.
Potentially.
Companies approaching a major debt maturity should review the balance sheet for assets being financed inefficiently.
Examples include:
BDC notes that refinancing can include leveraging fixed-asset equity to obtain additional capital.
For equipment-heavy companies, Mehmi's equipment refinancing guide explains how eligible machinery can support a separate financing structure.
A sale-leaseback structure can also convert owned equipment into liquidity while allowing the company to continue using the assets.
However, monetizing assets is not free capital.
Management must evaluate the new payment obligation, tax treatment, end-of-term obligations, transaction costs and whether transferring valuable unencumbered assets weakens the company's future collateral position.
Sometimes.
A company may have a CAD $100M+ term-debt problem and a separate working-capital problem.
Combining them unnecessarily can increase the permanent refinancing requirement.
For example, if CAD $15 million of the existing bank exposure is supporting accounts receivable, management may evaluate whether that portion belongs in a borrowing-base revolver or receivables facility rather than the replacement term loan.
For companies with strong B2B receivables, Mehmi's guide to invoice factoring in Canada explains another way receivables can be monetized.
The objective is not to factor receivables simply because a maturity is approaching.
It is to match short-duration assets with appropriate short-duration capital and avoid using expensive long-term debt to finance a working-capital cycle.
When debt is no longer the appropriate solution.
Suppose the business owes CAD $120 million but, after reviewing sustainable EBITDA, collateral values and downside cash flow, capital providers collectively conclude the company should carry only CAD $90 million of debt.
The remaining CAD $30 million is not automatically a "lender gap."
It may be an equity gap.
Possible solutions could include:
BDC explicitly notes that refinancing is not always the answer and that businesses may need additional shareholder or outside investment instead.
This is one of the most important decisions in a large maturity.
Replacing excessive debt with more expensive debt may postpone the underlying problem rather than solve it.
Assume a Canadian operating company has CAD $120 million of debt maturing.
Its banking group is prepared to refinance CAD $70 million, leaving a CAD $50 million gap.
After reviewing cash flow and leverage, the company chooses the following illustrative structure:
Assume the CAD $70 million senior facility carries a 6.75% annual rate, monthly payments, a 10-year amortization schedule and a five-year contractual maturity.
The estimated monthly payment would be approximately CAD $803,769.
After 60 payments, approximately CAD $40.83 million of senior principal would still remain due at the five-year maturity.
Total scheduled senior payments during those five years would be approximately CAD $48.23 million, and total cash required including the remaining maturity balance would be approximately CAD $89.06 million.
Now assume the CAD $30 million private-credit tranche carries an illustrative 10.5% annual cash interest rate, paid monthly, with the principal due after three years.
Monthly private-credit interest would be approximately CAD $262,500.
Over 36 months:
During the first three years, combined scheduled senior and private-credit debt service would therefore be approximately CAD $1.07 million per month, or about CAD $12.80 million annually.
Assume further that the bank charges an illustrative 1.0% financing fee, or CAD $700,000, and the private lender charges an illustrative 2.0% financing fee, or CAD $600,000.
That creates another CAD $1.3 million of financing fees, before legal, appraisal, advisory, diligence, hedging, registration or other closing expenses.
The important credit issue is not simply whether the CAD $120 million maturity closes.
The company still has a CAD $30 million private-credit maturity in year three and approximately CAD $40.83 million remaining on the senior facility at year five.
Management therefore needs a credible deleveraging or refinancing plan before accepting the original structure.
These figures are illustrative assumptions only. They are not a Mehmi Financial Group financing offer, quoted lender terms or evidence that a similar transaction would be approved.
Start early and give prospective capital providers a refinance package rather than a document dump.
For a $100M+ transaction, expect serious underwriting around:
Most importantly, explain why the bank is not refinancing the full maturity.
Private lenders will discover the answer during diligence anyway.
If the issue is lender concentration, explain it.
If EBITDA fell, explain why and whether the decline is temporary.
If leverage increased because of an acquisition, show the integration plan.
If covenants were breached, address the breach directly.
For companies considering several non-bank solutions, Mehmi's alternative business financing guide for Canada provides background on matching the financing product to the underlying problem.
Earlier than a normal business-loan renewal.
Large refinancings can require multiple capital providers, diligence workstreams, security negotiations, appraisals, legal documentation and investment-committee approvals.
Waiting until the final weeks before maturity can materially reduce options because potential lenders know the borrower has limited time.
The stronger approach is to work backward from the maturity date.
Management should know:
A maturity date is predictable.
It should not become an emergency simply because the financing process started too late.
Then management should obtain restructuring and legal advice before liquidity becomes critical.
Possible negotiated outcomes may include maturity extensions, covenant amendments, principal deferrals, asset sales, new equity, debt exchanges or broader restructuring arrangements.
BDC notes that companies facing more serious financial difficulties may need to consider restructuring options rather than simply borrowing additional money.
For larger insolvent Canadian companies, the Companies' Creditors Arrangement Act can become relevant. The federal legislation applies where qualifying claims against the debtor company or affiliated debtor companies exceed CAD $5 million, subject to the Act's other requirements.
That is a legal restructuring process, not a financing product, and companies facing potential default should obtain advice from appropriate legal and insolvency professionals.
The best time to solve a maturity is generally before the company reaches that point.
Large private-credit transactions exist, but availability depends on the borrower's cash flow, leverage, assets, industry, transaction structure and lender appetite. There is no universal maximum amount or approval threshold.
The remaining portion can be evaluated separately. Depending on the business, potential solutions may include private credit, ABL, junior debt, asset monetization or additional equity. The first question is whether the 30% represents a financing gap or leverage that should actually be removed from the balance sheet.
It is often more expensive on an all-in basis because private lenders may accept complexity, leverage or execution risk that conventional banks will not. Compare interest, fees, prepayment provisions, covenants, security and refinancing requirements rather than just the headline rate.
Yes. A refinancing does not necessarily require replacing the bank. The bank may retain a senior term facility, revolving line or specific collateral position while another capital provider finances a separate portion of the stack.
A unitranche facility combines risk that might otherwise be split between senior and subordinated lenders into one negotiated facility. It can simplify documentation and lender coordination, although pricing and covenant terms need to be compared with a traditional multi-lender structure.
Potentially, but the senior lender's documents, security position and consent rights must permit it. An intercreditor or priority agreement may be required.
Not unless there is a credible repayment event. A bridge makes more sense where the permanent refinancing, asset sale, equity contribution or another defined takeout is identifiable. Otherwise, the bridge can simply create another maturity problem.
Treating closing day as the finish line. A structure that refinances today's maturity but creates an unmanageable private-credit balloon or liquidity shortage several years later has only deferred the problem.
For a large or complex debt maturity, prepare the total financing amount, Canadian province or provinces involved, existing debt structure, use of funds, available collateral and maturity date.
Mehmi Financial Group operates as a financing brokerage and intermediary, not a direct lender. For larger or specialized transactions, the first step is reviewing the capital requirement and determining whether an institutional, private-credit, asset-based or other specialty capital structure may be appropriate. Final underwriting, pricing, structure and approval remain with the participating capital providers.
Call 833-863-4644 or use the Mehmi Financial Group contact page to discuss the transaction.
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