Canada Small Business Financing Regulations

1.1 (1) For the purposes of subsections 4(3) and 7(2) of the Act, borrowers are related when one borrower

• (a) controls, directly or indirectly in any manner, the other borrower;

• (b) is controlled, directly or indirectly in any manner, by the same person or group of persons as the other borrower;

• (c) carries on their small business in partnership with the other borrower, which carries on another small business; or

• (d) shares management services, administrative services, equipment, facilities or overhead expenses of the business with the other borrower, but is not in partnership with that borrower.

(2) [Repealed, SOR/2022-157, s. 2]

(3) For the purpose of subsection (1), control means to hold shares of a corporation to which are attached more than 50% of the votes that are necessary to elect a majority of its directors.

(4) Despite subsection (1), borrowers whose businesses are located at different premises are not related if neither borrower derives more than 25% of their actual or projected gross revenues from the other.