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Learn how to structure $50M+ Canada-U.S. capital raises using private credit, equity, ABL and cross-border holding structures.
Raising $50 million, $100 million or several hundred million dollars across Canada and the United States creates a different problem from obtaining a domestic business loan.
The company has to decide where the capital should be raised, which entity should borrow or issue securities, what currency the obligations should use, which assets secure each lender, and which Canadian and U.S. securities, tax and foreign-investment rules apply.
At this scale, those decisions can matter as much as the headline cost of capital.
Quick Answer: A $50 million+ Canada-U.S. capital raise can combine senior private credit, asset-based lending, subordinated debt, preferred equity and common equity. The structure should usually place debt near the cash flow and collateral supporting it, match debt currency to operating revenue where practical, and address securities, tax, security-perfection and foreign-investment rules in both countries before investors are approached.
Start with the corporate structure, not the investor list.
A company might have:
The first question is therefore not simply, "Who will give us $75 million?"
It is:
Which entity needs the capital and which entity generates the cash that will repay it?
Consider a Canadian parent raising capital to expand a U.S. subsidiary.
If substantially all of the new project's revenue will be generated in USD, placing USD-denominated debt at or near the U.S. operating company can create a more natural match between debt service and operating cash flow.
By contrast, borrowing USD at the Canadian parent when the parent earns mainly CAD can expose the company to an additional foreign-exchange risk.
That does not mean debt should always sit at the operating company. Existing credit agreements, tax considerations, structural subordination, guarantees, collateral location and investor requirements may dictate another approach.
The point is to decide deliberately.
For companies already conducting physical business across the border, Mehmi's guide to U.S. equipment dealer financing for Canadian customers illustrates the same underlying principle at the asset level: where the customer, asset, security and payment stream are located materially affects how financing should be structured.
A $50 million+ transaction does not have to be funded entirely with one loan or one equity investor.
The capital stack can potentially include several layers.
A private-credit fund can provide a first-lien term loan secured by business assets and supported primarily by enterprise cash flow.
The Federal Reserve reported that U.S. nonfinancial corporate debt totaled about US$15.7 trillion in Q2 2026, with private-credit loans representing approximately 7.1% of that debt.
Private credit therefore represents a material institutional financing channel rather than a niche substitute for bank lending.
But flexibility comes with underwriting.
Private lenders can examine leverage, interest coverage, EBITDA quality, customer concentration, recurring revenue, capital expenditures, liquidity, collateral and the company's ability to refinance or repay the facility at maturity.
If a company has significant accounts receivable, inventory or other working-capital assets, an ABL revolver can sit beside the term financing rather than forcing long-term debt to fund every cash-flow fluctuation.
Canadian operators evaluating that structure can use Mehmi's Asset-Based Lending in Canada guide to understand borrowing-base mechanics and collateral monitoring.
That distinction is especially important for cross-border manufacturers and distributors.
A term facility can fund an acquisition, recapitalization or long-term expansion while the revolver funds inventory and receivables that rise and fall with sales.
Junior debt can fill the gap between first-lien capacity and the equity cheque.
Because repayment and collateral priority sit behind the senior lender, the required return is normally higher.
Intercreditor terms become critical.
Preferred equity can supply capital without adding the same mandatory amortization burden as senior debt.
It may carry a cash dividend, payment-in-kind return, liquidation preference, redemption rights or conversion features.
Those provisions need to be modeled just as carefully as loan interest.
Sometimes the correct answer is more equity.
If maximizing debt leaves the company unable to tolerate a 10% revenue decline or unexpected working-capital requirement, additional common equity may be economically safer even though it dilutes existing ownership.
Follow the cash flow and collateral first.
Suppose a Toronto-headquartered manufacturer owns a Michigan subsidiary.
The Michigan company has U.S. customers, U.S. receivables, U.S. machinery and USD operating cash flow.
A structure could potentially place a USD term facility and revolving facility at the U.S. borrower while the Canadian parent provides an equity contribution and appropriate guarantees.
Another transaction may justify borrowing at the Canadian parent and downstreaming funds into the United States.
That might occur where the Canadian entity has substantially stronger credit, controls most of the group's assets or already maintains the principal lending relationships.
Neither structure is automatically superior.
The analysis should address:
Canadian companies expanding U.S. sales can also review Mehmi's EDC equipment financing guide for Canadian exporters for a smaller-scale example of why export growth frequently requires both productive-asset financing and separate working-capital capacity.
If the transaction involves the issuance of securities, the U.S. securities analysis should happen before marketing begins.
The SEC states that every offer and sale of securities must either be registered or qualify for an exemption. Rule 506(b) of Regulation D permits private placements without general solicitation, while Rule 506(c) permits general solicitation when all purchasers are accredited investors and the issuer takes reasonable steps to verify accredited status.
A Canadian issuer approaching U.S. investors cannot assume that complying with Canadian securities law solves the U.S. side.
Similarly, a U.S. issuer selling part of a financing outside the United States may consider Regulation S. The SEC explains that Regulation S provides safe harbors for qualifying offshore offers and sales, and that a Regulation S tranche can coexist with a Regulation D offering.
Larger institutional securities transactions may also use structures involving Rule 144A resales to qualified institutional buyers, particularly in institutional debt markets. The exact offering exemption and resale mechanics should be designed by U.S. securities counsel rather than assumed from the investor's sophistication alone.
Canadian securities legislation has its own exempt-market framework.
National Instrument 45-106 provides several prospectus exemptions, including the accredited-investor exemption. The Canadian Securities Administrators also maintain Form 45-106F1 reporting requirements for issuers and underwriters relying on specified exemptions, with the reports filed through SEDAR+.
The minimum-amount exemption is another example, but it has important limitations. CSA guidance states that the purchaser must pay at least CAD $150,000 in cash under that exemption and that the exemption is not available to an individual purchaser.
For a $50 million institutional transaction, accredited investors and institutional investors will normally be more relevant than retail capital.
But investor sophistication does not eliminate compliance.
A U.S. fund investing in a Canadian issuer, or a Canadian institution investing in a U.S. issuer, still requires counsel to map the offering into the applicable exemptions in each jurisdiction.
Because capital raising itself can be a regulated activity.
The SEC specifically identifies activities such as finding investors, participating in solicitation or negotiation, and receiving compensation based on the outcome or size of a securities transaction as factors that can indicate broker activity requiring registration.
Canada has a comparable dealer-registration analysis under its securities regime. Guidance accompanying NI 31-103 applies a "business trigger" to determine whether an individual or firm is in the business of trading securities.
This distinction matters when hiring consultants, finders, financing brokers, investment banks or placement agents.
A company should not assume that anyone who has investor relationships can legally solicit investors and earn a percentage of capital raised.
For transactions involving securities, experienced Canadian and U.S. securities counsel should confirm that the intermediaries performing regulated activities hold the required registrations or fall within a valid exemption.
Match debt currency to cash-flow currency where practical.
A Canadian company that earns mainly CAD but borrows US$50 million may see its CAD debt-service burden rise simply because the Canadian dollar weakens.
The company can potentially address this through:
The appropriate hedge depends on the certainty, duration and currency of expected cash flows.
Do not treat currency risk as a treasury problem to solve after closing.
It is part of credit underwriting.
Mehmi's cross-border operational guides on financing Canadian buyers purchasing from U.S. sellers and making U.S.-to-Canada transactions financeable provide practical examples of how currency, documentation and jurisdiction affect otherwise straightforward transactions.
The same issues become much larger in a US$50 million or US$100 million capital structure.
This example is hypothetical. It is not a Mehmi Financial Group financing offer, investor proposal or indication of available pricing.
Assume a Canadian parent owns a U.S. operating company generating most of its expansion-related cash flow in USD.
The group needs US$70 million for:
One illustrative structure could be:
Initial funded sources equal US$70 million, while the remaining US$5 million revolver capacity provides additional liquidity subject to the borrowing base.
Assume the US$45 million term loan carries a 10% annual interest rate, 1% annual straight-line principal amortization paid monthly and a five-year maturity.
Monthly principal is US$37,500.
The first monthly term-loan payment would be approximately US$412,500, including US$375,000 of interest and US$37,500 of principal.
Total first-year term-loan payments would be approximately US$4.93 million.
Assume the revolver averages a US$5 million balance at an illustrative 8.5% annual rate. That adds approximately US$425,000 of first-year interest.
Combined first-year scheduled cash debt service is therefore approximately US$5.35 million, before unused-line fees, legal expenses, hedging costs, taxes or other obligations.
Assume the term facility also charges a hypothetical 1.5% upfront fee, or US$675,000. That fee is excluded from the debt-service calculation above.
After five years of 1% annual principal amortization, approximately US$42.75 million of the original term principal would still remain to refinance or repay at maturity.
Now consider currency.
At an illustrative rate of CAD 1.35 per US$1, US$5.35 million of annual debt service equals roughly CAD $7.23 million.
If the Canadian dollar weakened by 10%, to CAD 1.485 per US$1, the same USD obligation would cost approximately CAD $7.95 million.
That is roughly CAD $723,000 of additional annual cash requirement without any change in the loan's contractual interest rate.
If the U.S. subsidiary generates sufficient USD cash to service the USD obligations directly, much of that translation exposure can be avoided at the operating level.
That is why entity location and currency belong in the initial structuring discussion.
There is no single North American security filing that perfects every lender against every asset.
U.S. personal-property security interests generally involve UCC Article 9.
Most Canadian provinces and territories use PPSA regimes. Quebec uses its own civil-law framework, including registration through the RDPRM for relevant movable rights.
A cross-border lender may therefore require separate security documents, filings, legal opinions and guarantees covering multiple entities and jurisdictions.
A typical transaction could include:
Asset-heavy groups should also ask whether every hard asset belongs in the corporate facility.
A U.S. subsidiary with substantial machinery may be better served by separating long-lived assets from revolving working capital. Mehmi's U.S. guide to preserving an operating line when financing machinery explains this principle at the equipment level.
Canadian groups can apply a similar concept through ABL, dedicated equipment facilities or sale-leaseback structures rather than using one large general-purpose loan for everything.
Interest expense does not automatically produce an unlimited tax deduction.
In the United States, Section 163(j) generally limits deductible business interest, where applicable, to business interest income plus 30% of adjusted taxable income plus applicable floor-plan financing interest. The IRS lists a US$32 million gross-receipts threshold for the 2026 small-business exception, subject to the statute's other requirements.
Canada's EIFEL rules similarly limit net interest and financing expenses for affected taxpayers. The CRA states that the fixed ratio is generally 30% of adjusted taxable income for tax years starting on or after January 1, 2024, subject to exclusions, elections and the group-ratio regime.
Cross-border interest payments also require treaty analysis.
Under the current consolidated Canada-U.S. tax convention, qualifying interest beneficially owned by a resident of the other country is generally taxable only in that other country, but the treaty includes exceptions and limitation-on-benefits considerations that can change the result.
Do not structure a nine-figure intercompany or third-party loan based only on the headline treaty rule.
Tax counsel should test the actual borrower, lender, beneficial owner, security, cash-flow and ownership structure.
Debt by itself does not necessarily create the same foreign-investment issues as equity, but convertible debt, preferred equity, board rights and other governance rights can change the analysis.
In the United States, CFIUS retains jurisdiction over transactions that can result in foreign control of a U.S. business and can also review certain non-controlling investments involving sensitive U.S. businesses.
Canada similarly subjects foreign investment to the Investment Canada Act framework. The federal government states that foreign investments can be reviewed for national-security concerns regardless of value, including certain minority investments.
That does not mean a Canadian investor automatically creates a CFIUS problem or every U.S. investor triggers a Canadian review.
It means governance rights should be examined before the term sheet becomes binding, particularly in sectors involving sensitive technology, critical infrastructure, defence or sensitive data.
A $50 million+ financing should be presented like an institutional transaction.
Management should prepare:
For Canadian borrowers still assembling the credit package, Mehmi's guide to applying for a business loan in Canada provides the same underwriting logic at a smaller scale.
For acquisitions specifically, the M&A financing guide for Canadian business acquisitions explains why acquisition capital often requires buyer equity, senior debt, seller financing and working-capital capacity rather than a single loan.
The problem is often structure rather than lack of capital.
Transactions can stall because:
Cross-border documentation also creates more opportunities for mismatches.
Mehmi's guide to cross-border customer verification and funding delays shows how something as basic as inconsistent legal names, banking information or documentation can stop a much smaller financing.
On a $100 million transaction, entity and documentation errors become materially more expensive.
When the proposed structure creates more risk than the capital solves.
Management should reconsider the raise when:
Capital availability is not the same as debt capacity.
A sophisticated capital raise asks how much capital the company can use productively and support through a downside cycle, not simply how much investors are willing to provide.
Yes, potentially. The company must structure the offering to comply with applicable Canadian securities requirements and the relevant U.S. registration exemption or other securities-law framework. Investor type, marketing method, instrument and jurisdiction all matter.
Potentially. U.S. securities compliance does not replace Canadian securities analysis. Canadian counsel should determine which provincial prospectus exemptions, dealer-registration rules and reporting requirements apply to Canadian purchasers.
They solve different problems. Debt preserves ownership but adds mandatory repayment, covenants and refinancing risk. Equity reduces contractual debt service but dilutes existing shareholders and may introduce governance rights. Many $50 million+ transactions use both.
The operating cash-flow currency is an important starting point. USD debt can make sense against predictable USD revenue, while CAD debt may better match Canadian cash flows. Tax, collateral, hedging costs and lender availability also affect the decision.
Potentially, but the security package generally requires jurisdiction-specific documentation and perfection. UCC, PPSA and Quebec RDPRM issues cannot be treated as one universal lien filing.
That arrangement requires legal review. In the United States, transaction-based compensation, solicitation and participation in securities transactions are factors the SEC identifies when determining whether broker-dealer registration may be required. Canadian dealer-registration rules must also be considered.
Before liquidity becomes critical. A complex transaction can require financial diligence, modeling, securities-law analysis, tax structuring, lender or investor diligence, collateral work, foreign-investment review and documentation. More preparation also gives management greater ability to compare structures rather than accepting whichever capital can close.
For a cross-border transaction, start with the structure rather than a generic funding request.
When contacting Mehmi Financial Group, be prepared to discuss:
Mehmi Financial Group operates as a financing brokerage and intermediary rather than a direct lender, securities dealer or investment bank. For complex transactions, the initial review should determine whether the requirement fits commercial lending, private credit, asset-based or equipment financing channels, or whether appropriately registered and specialized capital-markets professionals are required.
Call 833-863-4644 or contact Mehmi Financial Group to discuss the transaction.
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