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Canada Small Business Financing Regulations (SOR/99-141)

Regulations are current to 2024-05-01 and last amended on 2024-04-12. Previous Versions

  •  (1) The borrower must, before the loan is disbursed, provide to the lender from, subject to subsection (2), an appraiser who is a member of any professional association that is recognized under a federal or provincial law and who is at arm’s length from the borrower, and, in the case of assets described in paragraph (c), from the lender, an appraisal, made within 365 days before the loan is disbursed, of the value of the assets or services intended to improve the assets, as the case may be, if a borrower uses, or intends to use, all or part of a loan to purchase

    • (a) assets, or services intended to improve the assets, from a person who is not at arm’s length from the borrower;

    • (b) all or substantially all of the assets of a going concern; or

    • (c) assets from the lender or its representative that, at the time of purchase, are being or had been used to secure a conventional loan of the lender.

  • (2) In the case of a loan to purchase equipment, leasehold improvements or intangible assets or to finance working capital costs, the appraisal must be made by an appraiser who is at arm’s length from the borrower and, in the case of equipment or leasehold improvements that are assets referred to in paragraph (1)(c), the lender.

  • (3) [Repealed, SOR/2014-7, s. 7]

  • (4) If an appraisal is required, the amount of the loan must be based on the lesser of

    • (a) the cost of purchasing or improving the asset or both, and

    • (b) the appraised value of the asset or improved asset.


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