Canada Small Business Financing Regulations

3 (1) A loan registration form must be signed by the borrower and the lender and contain the following information:

• (a) the borrower’s name and the civic address and telephone number of the small business;

• (b) the day on which the loan was made;

• (c) a statement setting out separately

  • (i) the total amount of the loan,

  • (ii) the estimated amount of the loan allocated to each class of loans referred to in paragraphs 5(1)(a) to (c), and

  • (iii) the amount of the loan allocated to the class of loan referred to in paragraph 5(1)(d);

• (d) the total estimated cost of the purchase or improvement to be financed by the loan;

• (e) the separate charges and premiums, if any, referred to in paragraphs 13(1)(a) and (b) that the borrower is required to pay;

• (f) the lender’s acknowledgement that the lender has not charged the borrower any fees or charges other than those authorized by the Act and these Regulations;

• (g) the borrower’s consent to

  • (i) the Minister’s audit of the loan approval and administration file held by the lender in respect of the loan, and

  • (ii) the release, by the Minister, of information with respect to the borrower’s outstanding loans, to another lender to whom the borrower applies for a loan;

• (h) the lender’s acknowledgement that, before making the loan, it verified within the branch where the loan was to be made, or if it has no branches, within itself, that the outstanding loan amount in relation to the borrower does not exceed the amount provided for in paragraph 4(2)(b) of the Act;

• (i) the borrower’s acknowledgement that the outstanding loan amount in relation to the borrower does not exceed the amount provided for in paragraph 4(2)(b) of the Act;

• (j) the borrower’s acknowledgement that the making of the loan is not prohibited by any of subsections 5(2) to (4) or (6);

• (k) the lender’s acknowledgement that, before approving the loan, the lender acted in accordance with the due diligence requirements referred to in section 8; and

• (l) the borrower’s acknowledgement, for the purposes of subsection 14(6), as to whether or not the borrower is at arm’s length from the landlord.

(2) For the purposes of paragraph (1)(i), a borrower who is related to the borrower means

• (a) a person who controls or is controlled by the borrower;

• (b) a corporation that is controlled by the same person who controls the borrower;

• (c) a person who operates or intends to operate, in partnership with the borrower, the small business in respect of which the loan was made; and

• (d) a person who operates or intends to operate a small business, not in partnership with the borrower, but who has agreed with the borrower to share management services, administrative services or facilities or overhead expenses for the operation of that small business with those for the operation of the small business in respect of which the loan was made.

(3) For the purposes of subsection (2), “borrower” includes a person to whom a guaranteed business improvement loan was made under the Small Business Loans Act if that loan is outstanding.

(4) For the purposes of subsection (2), “control” means the direct or indirect holding of shares of a corporation to which are attached more than 50% of the votes that may be cast to elect a majority of its directors.

(5) If a person referred to in subsection (2) is operating or intends to operate a small business that is independent of the small business in respect of which the loan was made, any outstanding loan amount attributable to that small business of the person is not included in the outstanding loan amount in relation to the borrower.

(6) A small business is independent of another small business if they are located at different premises and neither one derives more than 25% of its actual or projected gross revenues from the other.