Non-bank lenders are increasing their market presence in both
acquisition financing and the provision of financial solutions for
ongoing operations, including in the asset-based lending
context. The increased presence of non-bank lenders seems to
be driven by both the benefits of working with providers of
non-regulated alternative capital source funding and the regulatory
limitations faced by traditional bank lenders.
Banks are facing increased regulation which in some cases has
the effect of restricting their ability to underwrite
"riskier" transactions and may require the inclusion of
loan covenants which do not suit a borrower. In the event
there is a change in an existing borrower's business, a bank
may be precluded from continuing to provide credit facilities,
which would force a borrower to refinance with a non-bank lender at
an inopportune time. Banks are often less willing to provide
financing during the early stages of a business, during a downturn
or while capital is being actively reinvested.
Conversely, non-bank lenders emphasize the flexibility they
offer when formulating covenant packages and the fact that they are
not subject to the same stringent regulations as a traditional
bank. Often, borrowers seeking financing from a non-bank
lender have been turned down by a traditional bank or are seeking a
larger facility than a traditional bank is prepared to offer.
Non-bank lenders often work alongside traditional banks to
provide a complete solution for a borrower. For example, a
traditional bank might provide a senior secured revolving facility
and a non-bank lender would provide a senior secured term loan, a
mezzanine loan or a second lien facility.
When considering the most effective strategy to finance an
acquisition or ongoing operations, non-bank lenders may offer
worthwhile solutions – on their own or together with a
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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