• 30. (1) A lender, on the request of the borrower, may make a loan for the purpose of repaying a loan made by another lender in an amount not greater than the outstanding amount of the loan of the other lender if

  • (a) the loan term is not longer than the maximum period specified in paragraph 6(b); and

  • (b) security of the same rank is maintained or taken by the lender on the assets that were used to secure the loan of the other lender.

• (2) For the purposes of the Act and these Regulations, a loan that is made under subsection (1) is considered to be a loan of the same class as the loan of the other lender.

• (3) For the purpose of paragraph (1)(a), the loan term is the period beginning on the day on which the first payment of principal and interest is due in respect of the loan of the other lender and ending on the day on which the last payment of principal and interest is due in respect of the new loan.

• (4) A lender that makes a loan under subsection (1) must notify the Minister of the making of the loan in the form referred to in subsection 29(3). The Minister must determine whether the requirements set out in subsection 29(1) have been met and must notify both lenders of the determination.

• (5) Subsections 29(3) and (4) apply, with any modifications that the circumstances require, in respect of a loan made under this section.

31. When two or more lenders intend to amalgamate to form a new lender, they must notify the Minister in writing of the intention to amalgamate and of the day on which the amalgamation is proposed to take effect. On amalgamation, the Minister’s liability under the Act in respect of losses sustained by the amalgamating lenders as a result of loans made by them continues in respect of losses sustained by the new lender as a result of those loans and

• (a) the loans made by the amalgamating lenders are considered to have been made by the new lender;

• (b) claims for loss sustained in respect of a loan that have been paid by the Minister to each of the amalgamating lenders are considered to have been paid to the new lender; and

• (c) if, as a result of the amalgamation, the amount already paid by the Minister to the amalgamating lenders as a result of the Minister’s liability under subsection 6(2) of the Act is greater than the Minister’s liability with respect to the new lender, the Minister’s liability is deemed to be equal to the amount already paid.

32. A lender that discontinues its commercial lending business and sells all of its outstanding loans to another lender must notify the Minister in writing of the sale of the outstanding loans. The Minister’s liability under the Act in respect of losses sustained by the lender as a result of the outstanding loans continues in respect of losses sustained by the other lender as a result of those loans, and other loans of the other lender must not be taken into account in determining that liability.

• 33. (1) On the sale of all assets of a small business whose purchase or improvement is being financed by a loan, the borrower may be released by the lender from, and the purchaser may assume, liability in respect of the loan if

  • (a) the purchaser is approved as the borrower by the lender in accordance with the due diligence requirements referred to in section 8 and the outstanding loan amount is not greater than the amount referred to in paragraph 4(2)(b) of the Act;

  • (b) security of the same rank is maintained or taken by the lender on the assets that were used to secure the loan; and

  • (c) a guarantee or suretyship referred to in section 19 taken with respect to the loan is replaced with another guarantee or suretyship in accordance with that section of an equal or greater value.

• (2) On a change of partners in a partnership, an outgoing partner may be released from, and a new partner may assume, liability in respect of a loan if

  • (a) the new partner is approved by the lender as a borrower in accordance with the due diligence requirements referred to in section 8 and the outstanding loan amount is not greater than the amount referred to in paragraph 4(2)(b) of the Act;

  • (b) security of the same rank is maintained or taken by the lender on the assets that were used to secure the loan; and

  • (c) a guarantee or suretyship referred to in section 19 given with respect to the loan is replaced with another guarantee or suretyship in accordance with that section for an equal or greater value.

• (3) On leaving a partnership, an outgoing partner who is not being replaced with a new partner may be released from liability in respect of a loan if

  • (a) the remaining partners are approved by the lender as borrowers in accordance with the due diligence requirements referred to in section 8 and the outstanding loan amount is not greater than the amount referred to in paragraph 4(2)(b) of the Act;

  • (b) security of the same rank is maintained or taken by the lender on the assets that were used to secure the loan; and

  • (c) a guarantee or suretyship referred to in section 19 given with respect to the loan is replaced with another guarantee or suretyship in accordance with that section for an equal or greater value.