A senior secured term loan is the first-priority debt in an acquisition’s capital stack — a fixed amount advanced up front, repaid on a set schedule, and secured by a registered claim over the target’s assets that ranks ahead of any mezzanine debt, seller note or equity.
In Ontario and the other common-law provinces, that priority claim is registered as a general security agreement under the province’s Personal Property Security Act. Treadstone’s own comparison of term loans and revolving facilities notes that “both facility types utilize general security agreements registered under Ontario’s Personal Property Security Act,” and that “corporations frequently have both types of facility in place at once, from the same or different lenders, with the PPSA’s priority rules sorting out how the security interests interact.” British Columbia runs its own, separately enacted Personal Property Security Act (RSBC 1996, c. 359) on the same registration model. Quebec does not use a PPSA at all: its Civil Code governs security over movable property through the hypothec, a genuinely different regime, so a term loan secured against a Quebec target needs Quebec-specific advice rather than an Ontario-style general security agreement.
Illustrative Canadian mid-market pricing puts the senior lender’s advance around 3.0× EBITDA, priced near 10%, with lenders typically targeting debt-service coverage of roughly 1.2–1.5× EBITDA (deavo.ai/financing, illustrative estimate, not a financing offer).
A target earns $5,000,000 of EBITDA. The senior lender advances $15,000,000 (3.0× EBITDA) as a term loan, secured by a general security agreement registered against all of the target’s Ontario assets under the PPSA, and requires the business to maintain debt-service coverage of at least 1.3× EBITDA throughout the loan term — a covenant the sponsor’s mezzanine and equity layers are structured underneath, not around.
See also: Mezzanine debt · Subordination agreement · Leveraged buyout.
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