Canada Small Business Financing (Establishment and Operation of Capital Leasing Pilot Project) Regulations (SOR/2001-527)

12 (1) The registration of a capital lease shall be done on a form that shall be signed by the lessor and the lessee and contain the following information:

• (a) the lessor’s name, address and an identification number assigned by the Minister;

• (b) the lessee’s name and the address and telephone number of the small business;

• (c) the day on which the capital lease is entered into;

• (d) a statement setting out

  • (i) the total financing amount of the capital lease,

  • (ii) the registration fee referred to in subsection 14(1), if it is financed,

  • (iii) the cost of the equipment, and

  • (iv) the value of the bargain purchase option or the residual value of the equipment;

• (e) any charges and insurance premiums referred to in section 16, that the lessee is required to pay;

• (f) the lessor’s acknowledgement that the lessee was not required to pay any fees or charges other than those authorized by these Regulations;

• (g) the lessee’s consent to

  • (i) the audit, by the Minister, of the capital lease approval and administration file held by the lessor,

  • (ii) the release, by the Minister, of information in respect of the lessee’s outstanding capital leases registered with the Minister in accordance with these Regulations to another lessor to whom the lessee applied for a capital lease,

  • (iii) the release by the Minister, of information in respect of the lessee’s outstanding loans made under the Act and the lessee’s outstanding guaranteed business improvement loans made under the Small Business Loans Act, to another lessor to whom the lessee applied for a capital lease, and

  • (iv) the release by the Minister, of information in respect of the lessee’s outstanding capital leases registered with the Minister in accordance with these Regulations to a lender to whom the lessee applied for a loan;

• (h) the lessor’s acknowledgement that, before entering into the capital lease, the lessor verified within their organization, that the aggregate outstanding balance in respect of the lessee or a related lessee or borrower did not exceed $250,000;

• (i) the lessee’s acknowledgement that the aggregate outstanding balance in respect of the lessee or a related lessee or borrower does not exceed $250,000;

• (j) the lessor’s acknowledgement that the capital lease does not provide for any matter referred to in paragraphs 4(a) to (e); and

• (k) the lessor’s acknowledgement that, before approving the capital lease, the lessor acted in accordance with the due diligence requirements referred to in section 19.

(2) The registration form referred to in subsection (1) shall be accompanied by a capital lease cost form signed by the lessor which contains the following information:

• (a) the annual imputed rate of interest used in the calculation of the scheduled payments;

• (b) a complete breakdown of the calculation of the scheduled payments; and

• (c) in the case of used equipment, the fair market value of the equipment on the day on which the capital lease is entered into.