Canada Small Business Financing Regulations

The Canada Small Business Financing Regulations outline the rules and guidelines for small business financing in Canada. The regulations define key terms such as "borrower", "conventional loan", "equipment", and "going concern". They also specify conditions under which a loan must be registered, including registration within six months of the loan being made or a line of credit being opened.

The regulations establish four classes of loans: (a) to finance purchase or improvement of real property or immovables; (b) to finance leasehold improvements; (c) to finance equipment purchases or improvements; and (d) to finance intangible assets and working capital costs. Loans must fall within one of these prescribed classes.

Certain conditions apply to loans in each class, such as the requirement that at least 50% of the real property's area be used for business operations. The regulations also specify that a loan cannot be used to finance expenditures or commitments arising more than 365 days before approval, unless previously financed by a conventional loan. Loan terms are limited to 15 years for loans in classes (a) to (d), and five years for lines of credit in class (e).