A leverage multiple expresses an acquisition’s total interest-bearing debt as a ratio to a specified earnings measure — usually EBITDA — describing how much debt a capital structure carries relative to the cash flow available to service it.
No Canadian regulator, lender association or statistics agency in this review publishes a standard or typical leverage multiple for private Canadian acquisitions, and nothing here should be read as implying one. What is sourced is the mechanism that actually limits leverage on a given file: a leverage-ratio covenant and a DSCR that the deal must clear, not a headline ratio quoted in advance.
One real, published number does function as a leverage ceiling for its slice of the deal: the CSBFP’s $1.15 million maximum loan applies regardless of the target’s size, so for a smaller acquisition the programme’s own loan cap — not any EBITDA ratio — can be the binding constraint on that tranche before a lender ever runs its own leverage math.
In practice, the covenant package is what does the work a single leverage number cannot: a lender documents a leverage covenant — “limits on how much total debt the business carries relative to its earnings or equity” — alongside a DSCR floor, and it is routinely the DSCR test, not the leverage ratio, that binds first when earnings soften, because DSCR reacts to a cash-flow dip immediately while a leverage ratio measured against a slower-moving debt balance can lag behind it.
A target generates $1,000,000 of EBITDA — right at the point where underwriting typically shifts from SDE to EBITDA. The buyer proposes acquisition debt of $2,800,000, a 2.8-times leverage multiple the buyer and lender negotiate for this file specifically. At an illustrative all-in rate of 9 percent, amortizing over seven years, annual debt service (principal and interest) works out to roughly $556,000. Tested against a DSCR floor of 1.30 times on EBITDA, the maximum debt service the lender will actually underwrite is $1,000,000 divided by 1.30, or $769,231 — comfortably above the $556,000 this structure requires, so the deal clears on DSCR even though the 2.8-times multiple itself was never checked against any published benchmark, because none exists.
See also: debt service coverage ratio, financial covenant and Canada Small Business Financing Programme.
A 30-minute call is enough to tell you whether AI pays for itself here.
Nobody publishes Canadian transaction data, so every valuation in this country quotes an American benchmark. We are building the Canadian one — multiples, asking-to-sale spreads and days on market, by sector and by city. Leave an email and you will see it first.
No pitch, no listings. One email when the first report lands.
