Canada Small Business Financing Regulations

25.1 (1) Despite the fact that the requirements with respect to appraisals set out in section 9 or subsection 16(2) have not been satisfied in respect of a loan, the Minister must pay the lender the amount of any loss, calculated in accordance with subsection 38(7), sustained in respect of the loan if

• (a) the non-compliance was inadvertent; and

• (b) the lender provides the Minister with documentation that substantiates the value of the assets or services intended to improve the assets, as the case may be, during the period of 365 days before the loan was disbursed by the lender or on the day the loan was disbursed.

(2) Subsection (1) does not apply to appraisals of real property or immovables.

(3) Despite the fact that the lender has not provided the documentation referred to in paragraph (1)(b), the Minister must pay the lender the amount of any loss, calculated in accordance with subsection 38(7), on the portion of the amount of principal outstanding on the loan to which the non-compliance does not relate.