Canada Small Business Financing Regulations

12 (1) The maximum annual rate of interest payable in respect of a loan referred to in any of paragraphs 5(1)(a) to (d) on the day on which the loan is made or renewed or on which the loan term is amended, or on which a document is signed that sets out the terms of the loan that is made or renewed or that sets out the amended loan term, must not exceed

• (a) in the case of a floating rate loan, the aggregate of 3% and the prime lending rate that is in effect at that lender on each day of the loan term, beginning on the day on which the loan is made; and

• (b) in the case of a fixed rate loan, the aggregate of 3% and

  • (i) the single family residential mortgage or hypothec rate in effect at that lender for the loan term, or

  • (ii) in the case of a loan term of more than five years if there is no single family residential mortgage or hypothec rate for that loan term, the five-year single family residential mortgage or hypothec rate.

(2) The maximum annual rate of interest payable in respect of a loan referred to in paragraph 5(1)(e) is the aggregate of 5% and the prime lending rate that is in effect at the lender on each day of the line of credit term, beginning on the day on which the line of credit is opened.