If you are under the misconception that the BDC is not a market leader, think again.

The Bank doubled its asset base from 1995 to 2001 and intends to do it again over the next five years.

An important part of this expansion is the Subordinate Finance Group, formed to provide a leading-edge source of financing to growth industries. BDC acts as a complementary financier to small and medium-sized enterprises.

The BDC's Subordinate Financing Division is one exciting example. It is available at a time when statistics say the need has never been greater. Subordinate financing, also known as mezzanine financing, is a specialized service suited to businesses that enjoy healthy cash flow, but may not boast a large asset base.

Perhaps such a business seeks funds to buy out a senior partner who wishes to retire, to facilitate a corporate acquisition, or simply requires working capital to facilitate its growth.

Introducing the BDC Subordinate Financing team, from left, Walter Maciurzynski, Tanya Madson, Douglas Helmcken, Owen Renton (Team Leader), Len Trotter and Brenda Wall. This Mid-West team services Alberta, Saskatchewan and Manitoba.

If a company represents a sector which isn't fixed-asset related, it may not possess the significant property holdings, buildings or equipment that are traditionally offered as security for a loan.

That's where the BDC Subordinate Financing team enters the picture.

"We view ourselves as a cash-flow lender, a business accelerator," explained team leader Owen Renton.

"We supply funding that is subordinate to other senior debt owed by a client company. We position our financing so that it looks more like equity than debt and, in fact, we offer equity for management buyouts."

Subordinate financing is most often sought by solid oil and gas service companies, software, high-tech or manufacturing companies that are in a high-growth stage wherein traditional sources of financing are not able to provide the funds to grow to the next level.

For example, CAM Tech Industries, a Calgary laser manufacturer, presented BDC's Subordinate Financing team with a challenge that arises more frequently than you might imagine.

"They were looking at a management buyout," explained Mr. Renton. "The founder of the company wanted to retire and offered his successor a five-year option to purchase the business," he said.

However, the business grew beyond their expectations. Brad Moore (president after the buyout) decided to exercise his option during its second year.

Mr. Moore sought help from BDC, which enlisted a syndicate of two other lenders to provide funds for the client to expedite the purchase.

"BDC stuck with painful ups and downs of the deal for 18 months until it successfully closed," Mr. Moore gratefully recalled.

"As this was my first deal of this magnitude, BDC offered me both financing and mentoring. BDC's financing terms were market competitive and the . . . professional support of the group is superb," said Mr. Moore.

As a second example, Mr. Renton cited the case of S.i. Systems Ltd., one of the premier IT specialist placement agencies in the country.

This company, which pursues a growth-through-acquisition strategy, sought BDC's help to complete the strategic acquisition of an established IT placement agency in Ottawa.

"We provided financing in conjunction with the company's house bank," Mr. Renton recapped. "By partnering, we cut down on the overall cost of the financing."

Derek Bullen, president of S.i. Systems, expressed his gratitude this way: "The BDC took the time to understand our business plan, evaluate it, and provide the right financing we needed for our growth. Thank you for believing in us, BDC; we look forward to working together on our next acquisition."

These testimonials, in conjunction with BDC's distinguished 60-year history, speak volumes for the bank's credibility. "We are well-known as a business banker," Mr. Renton explained. "

We have the versatility to provide a wide range of non-dilutive financing, starting from as low as $300,000 up to $5 million, with customized terms and conditions," he continued.

Business operators who seek this brand of creative and flexible financial support are urged to contact Owen Renton and his team by phoning: 403.292.5001.

Or check the BDC website: www.bdc.ca.

Clearly, the goal is to make a significant contribution to the success of dynamic and innovative businesses in Canada.

The Business Development Bank of Canada is a financial institution wholly owned by the Government of Canada.

BDC plays a leadership role in delivering financial and consulting services to Canadian small business, with a particular focus on technology and exporting.