Small Businesses Loans Regulations — 26
26 (1) Other than as prescribed by this section, the Minister’s liability to a lender with respect to a business improvement loan made pursuant to the Act ceases if the loan is transferred to, assigned to or acquired by another lender or any other person. (2) Where a lender has made business improvement loans under the Act and the lender subsequently sells all of the business improvement loans outstanding on its books to another lender that is the successor lender, or amalgamates with one or more other lenders to form a newly amalgamated lender, the Minister’s liability under the Act continues in favour of the successor lender or the newly amalgamated lender, as the case may be, on the basis that, as of the effective date of the purchase or amalgamation, (a) the amount of all business improvement loans that were made by the selling lender and the successor lender or by the amalgamating lenders and that were registered by the Minister pursuant to section 25 shall be aggregated and deemed for the purpose of section 5 of the Act to have been made by the successor lender or the newly amalgamated lender, as the case may be; and (b) the amount of all claims for loss previously paid by the Minister to the selling lender and the successor lender or to the amalgamating lenders, as the case may be, shall be aggregated and deemed to be a loss sustained by the successor lender or the newly amalgamated lender, as the case may be, for the purpose of section 5 of the Act. (3) Subject to subsection (4), where a lender has made business improvement loans under the Act and the lender subsequently (a) sells all of the business improvement loans outstanding on its books to a purchaser that is a credit union, caisse populaire or other cooperative credit society or a corporation that, while not as yet designated by the Minister as a lender for the purposes of the Act, is eligible to be designated as a lender pursuant to paragraph (b) or (c) of the definition lender in section 2 of the Act, or (b) amalgamates with one or more credit unions, caisses populaires or other cooperative credit societies or corporations to form an amalgamated corporation that, while not as yet designated by the Minister as a lender for the purposes of the Act, is eligible to be designated as a lender pursuant to paragraph (b) or (c) of the definition lender in section 2 of the Act, the Minister’s liability under the Act continues in favour of the purchaser or amalgamated corporation, as the case may be, if as of the effective date of the purchase or amalgamation, (c) the amount of all business improvement loans that were made by the selling lender or the amalgamating lender and that were registered by the Minister pursuant to section 25 are deemed to have been made by the purchaser or the amalgamated corporation, as the case may be, and (d) the amount of all claims for loss previously paid by the Minister to the selling lender or the amalgamating lender, as the case may be, are deemed to be a loss sustained by the purchaser or amalgamated corporation, as the case may be, for the purpose of section 5 of the Act. (4) In the case of a sale or amalgamation referred to in subsection (3), the Minister’s liability continues only if (a) the purchaser or the amalgamated corporation, as the case may be, applies to the Minister, before the acquisition or amalgamation or within one year thereafter, for designation as a lender for the purposes of the Act and for continuity of the Minister’s liability under the Act with respect to those business improvement loans that had been made by the selling or amalgamating lender; and (b) the Minister designates the purchaser or the amalgamated corporation as a lender for the purposes of the Act. SOR/87-591, s. 14; SOR/92-220, s. 12; SOR/95-80, s. 2(E)