Mortgage for Small Business Loan

By Winnie J Luk

Refinancing

Please note that this article deals with a mortgage on residential property to secure a small business loan.
In cases where the lending institution finds that the business has sufficient collateral, the lending institution might take a security interest in the business assets rather than on the borrower’s personal home.

When obtaining a mortgage to finance your business, your lawyer must::
gather from you supporting materials,
arrange for you to sign documents, and
confirm the all materials are in order before the loan may be released, all before closing on behalf of the lending institution for compliance purposes.

Such procedures are lengthy and much of the supporting documents take time to arrange/order. Accordingly, legal professionals request the clients confirm their financing matters with the lending institution at the earliest convenience so that the lender can forward loan instructions to the lawyer as soon as possible.

As a heads up, the lending institution will typically require the following steps to be performed between the lawyer and client before closing.

Independent Legal Advice (from Borrower’s Spouse who is a Guarantor)

Certificate of Independent Legal Advice from independent lawyer for acting for the borrower’s spouse who is a guarantor.

Independent Legal Representation (from other Guarantor)

Certificate of Independent Legal Representation from independent lawyer acting for a guarantor.

For Freehold Homes
Updating the home / fire insurance policy of each guarantor to reflect the lending institution and address of service as the loss payee effective the closing date
Consent re Conflict to have your lawyer act for you and your lender
Statutory Declaration re Property
Acknowledgement re Title Insurance
Acknowledgement re Standard Charge Terms of Mortgage
Acknowledgement and Direction for your lawyer to electronically register your mortgage on the closing date
For Condos
Status Certificate issued within 90 days before closing for each guarantor
Consent re Conflict to have your lawyer act for you and your lender
Statutory Declaration re Property
Acknowledgement re Title Insurance
Acknowledgement re Standard Charge Terms of Mortgage
Acknowledgement and Direction for your lawyer to electronically register your mortgage on the closing date

The law firm Landmark Law Professional Corporation will be pleased to assist with your refinancing matters.

Disclaimer: This article does not contain legal advice and only provides general information. It is not intended to replace advice from a qualified legal professional and should not be relied upon to make decisions. In all cases, contact your legal professional for advice on any matter referenced in this article before making decisions. Use of this article does not establish a lawyer-client relationship.

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