Canada Small Business Financing Regulations

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 date on which the first principal payment is due in respect of the loan of the other lender and ending on the date on which the last principal payment 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.