A subsidiary of First West Credit Union said the demand for itsspecialized subordinated debt financing services is growing.

“The economic uncertainty over the last few years caused somebusiness people to put important purchasing decisions on hold,"said Rob Napoli vice president at First West Capital, a division ofthe $6.3 billion First West Credit Union in British Columbia."However, there has recently been a change in attitudes towardbusiness acquisitions."

Formed in 2010, First West Capital has a $60 million fundestablished to provide subordinated debt and mezzanine financing tosmall- and medium-sized businesses. So far, six deals totalingnearly $6.5 million have been approved or funded.

Subordinated debt is used as a financing method for growingbusinesses that have proven cash flows but cannot qualify forsufficient conventional business loans, according to thesubsidiary.

To date, the First West Capital deals have been mainly focusedon change of ownership transactions such as family succession,management buy-outs or deals between partners, according to thesubsidiary.

Napoli said he expects this trend to continue, particularly inthe small- and medium-sized businesses market where there is ahigher prevalence of family ownership and owner-operatedbusinesses.

Napoli said while First West Capital is carefully watchingdevelopments in Europe and the U.S. and their potential effect onthe British Columbia market, the activity the division has seenreflects a shift in confidence in seizing opportunities forbusiness growth.