Category Archives: Canadian Commercial Lenders

Wanted: MFDA and IIROC member assets

One of my clients is paying top dollar for the assets of MFDA and IIROC member firms.

Please contact me directly with referrals.

Successful sales will be rewarded with a generous contribution to your favorite charity.

Eric Grossman, CGA
Email: eric.grossman@grossmancga.com
Tel: 647.333.7229

LinkedIn profile: http://ca.linkedin.com/in/ericgrossmancga

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See: Available: Funds

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the Canadian Securities Group,

or the Canadian Accountants Group!

Changes Affecting Canada’s Payments and Cards Industry in 2011

By Blair KeefeDan LoganPeter Aziz and Eli Monas of Torys LLP

The Financial Consumer Agency of Canada (FCAC) issued several guidance notes and decisions affecting the payments and card business of federally regulated financial institutions (FRFIs) and others in 2011. In this bulletin, we highlight some of the FCAC’s more important pronouncements.

Background

In January 2010, the Canadian government introduced the Credit Business Practices Regulations1 (CBP Regs) and amended the Cost of Borrowing Regulations (CoB Regs) under the Bank ActTrust and Loan Companies Act and the Insurance Companies Act to enhance the protection of consumers of financial products and to better ensure that consumers have access to credit on terms that are fair and transparent. In addition, in August 2010, the government introduced a Code of Conduct for the Credit and Debit Card Industry in Canada (the Code) to promote greater transparency for business owners and consumers who use credit and debit cards. In addition to monitoring various other consumer provisions applicable to FRFIs, the FCAC monitors compliance with, and provides guidance on the interpretation of, these regulatory requirements.

Asset Acquisitions In Ontario: Buying Liability In Bulk

by Peter Moffatt of Gardiner Roberts LLP

Ontario’s Bulk Sales Act poses a challenge to investors who want to acquire an Ontario business. An investor who is considering the acquisition of a business based in Ontario, Canada, and the attorneys who are advising such an investor, need to be aware of the application of Ontario’s Bulk Sales Act,R.S.O. 1990, c. B.14 (BSA).

Bulk sales legislation, including the BSA, has its roots in English law and historically was common in many jurisdictions in North America. Today, Ontario is one of the few remaining jurisdictions in North America, and the only jurisdiction in Canada, which still has bulk sales legislation in force. Several jurisdictions in the US, including California, Georgia, Maryland, Virginia and the District of Columbia, continue to have bulk sales legislation in force, and additional jurisdictions in the US, while no longer having in force bulk sales legislation of general application, have bulk sale notification provisions embedded in their taxing statutes.

The primary reason cited for the repeal of bulk sales legislation in jurisdictions of Canada other than Ontario is, in the words of the Supreme Court of Canada, that bulk sales legislation achieves its goals “only at the cost of significant commercial inconvenience, disruption and expense”: National Trust Co. v. H&R Block Canada Inc., [2003] 3 S.C.R. 160, at para 8 (H&R Block). The purpose of this article is to describe the types of transactions to which the BSA may apply and to provide insight into how to overcome BSA compliance issues.

Investing In Saskatchewan Farm Land

by Robert Kasian of MacPherson Leslie & Tyerman LLP

“If you care at all about the future of the world’s food supply, you care – whether you know it or not – about Saskatchewan.” (Andrew Ross Sorkin, Columnist – The New York Times, October 11, 2010)

Saskatchewan has received a lot of attention in the world press and investment community over the past several years. In particular, investment in Saskatchewan farm land has been on the radar of some of the world’s most prominent investors for several years. This interest has been driven by several factors including Saskatchewan’s booming economy, Canada’s stable financial and political environment, growing food demand and increasing commodity prices. At an average price of approximately C$500/acre, Saskatchewan also has some of the cheapest farm land in the developed world. In Alberta the average price is approximately C$1,400/acre and in the United States almost US$3,000/acre. In the United Kingdom, the average price of farm land is approximately US$10,000/acre. All of these factors have contributed to unprecedented interest in Saskatchewan farm land as an investment.

The Power of “Why”

By Harvey Mackay

Whether you’re managing a team of employees or you’re on your own, remember that although what you do and how you do it are important, it’s the “why” that provides real motivation to succeed.

An experiment conducted by the University of Pennsylvania’s Wharton School of Business demonstrates the power of “why.”  At a university call center where employees phone alumni to solicit contributions to scholarship funds, the staff was randomly divided into three groups:  The first group read stories written by former call center employees about the benefits of the job (such as improved communication and sales skills).  The second group shared accounts from former students about how their scholarships helped them with their education, careers and lives.  The third, a control group, read nothing, just explained the purpose of the call and asked for a contribution.

After a month, the researchers found that the first group and the third group raised roughly the same amount of money from alumni after the experiment began as before.  But callers in the second group, who had related the stories about the impact of the scholarships students received from the fund-raising campaign, raised twice as much money from twice as many alumni as they had before.

Sales Thought – A Plan to Finish

by Nick Miller of Clarity Advantage

In which we are reminded to prepare a plan to finish our sales processes.

“So, are we going ahead, then?”

This question asked of me by Kyle, a bank residential mortgage specialist. I had called him for information about his bank’s lending procedures, closing costs, time frames, etc. etc. etc. and rates. I’d called him, specifically, because (1) I use one product from his bank and (2) their rates are among the best in the market at this point. My other option was to apply for the loan with Bob, a specialist who has assisted me with multiple refinancings during the 30 years I’ve lived in Massachusetts. His rates and terms weren’t quite as good. I’d called Bob first, then Kyle.

“So, are we going ahead, then?”  Kyle had heard a pause – the slightest waffle in my voice as he finished sharing his information.  I was feeling the impact of some loyalty to Bob.  I was thinking, “I want to think about it.”

Sales Thought – Before The Cold Sets In

by Nick Miller of Clarity Advantage

In which we are reminded to engage our clients on what’s top of mind for them right now rather than on what’s top of mind for us.

I live near Boston, Massachusetts.  The Red Sox are finished.  Winter is coming.  Around the Miller household, we are preparing our house and garden for the winter.  Storm windows hung up, hosta cut down, lime and fertilizer spread around. Early days, still, and we’re working our way through the list, week by week, toward the inevitable arrival of sharply colder temperatures and snow.

As a business owner, I’m feeling like I’m in the same position now – another economic winter is coming, and I need to prepare.

The news coming out of the Eurozone ranges from “not encouraging” on a good day to “frightening” on other days.  U.S. and foreign stock market heaves and rolls leave me sea sick as my investment values bounce up and down, almost carelessly. The political and regulatory environment in this country leaves me shaking my head.  Our clients’ outlooks for 2012 range from guarded optimism to bracing for a crash.

What is the current status regarding commercial lending practices in Canada as we are heading into the month of October, 2011? Is it business as usual or ???

John Eric Pollabauer posted this question to the Canadian Commercial Lenders group on LinkedIn:

“What is the current status regarding commercial lending practices in Canada as we are heading into the month of October, 2011? Is it business as usual or ???”

For myself [EG], account managers from two financial institutions tell me that at the same time as they are being pushed to produce, credit is being very difficult on each deal. The result is a lot of resulting stress and unhappiness.

I believe it helps everyone when we share our experiences with others. Please enter your comments below. I will then publish them for you, but omit your name and institution, unless you wish otherwise.

Retractable Shares: The Unexpected Creditor

By Richard Dusome of Gowling Lafleur Henderson LLP

When structuring a new financing for a corporate borrower, lenders typically obtain postponements from all other creditors and shareholders advancing loans to the proposed borrower.  Postponements establish the lender’s priority to receive payment from the borrower vis-à-vis these other known creditors.

However, some shareholders who have not actually advanced loans to the borrower may still hold shares that contain a right of retraction that will require the borrower, at the shareholder’s option,  to purchase the retractable shares at a pre-arranged price following the issuance of an exercise notice.  The retraction serves to create a new debt obligation out of what was originally an equity holding.

Guarantor Waivers of PPSA Rights in British Columbia

By Mike Todd of Gowling Lafleur Henderson LLP

Lenders should be aware that one of the waivers found in most standard form guarantees of certain statutory rights is not effective under the British Columbia Personal Property Security Act (“BCPPSA”).

This was the result in the recent BC Supreme Court decision HSBC Bank Canada v. Kupritz. The facts of that case are unremarkable. A trucking company went out of business leaving an unpaid debt to the bank of approximately $1 million. The bank was unable to recover that amount from the company’s assets and therefore sued the two principals of the company on their unlimited guarantees. One of the principals defended the claim on the basis that the bank had breached its obligations to him under the BCPPSA by failing to secure the company’s assets, improvidently realizing on the collateral seized, failing to provide notice of the impending sale of the collateral and failing to provide an accounting.

Banks Have Right To Hold Tight In Paying Cheques – Ontario Court holds that banks need not bear the risks of cheques being dishonored

By Lisa Brost and Jeffrey Levine of McMillan LLP

Generally speaking, banks’ customers have no immediate right to the proceeds of the cheques that they deposit. Under the terms of most banking services agreements, banks can place holds on cheques deposited by their clients for a reasonable period of time. Further, even if a hold is not put on a cheque, any advance of credit by a bank on deposit of a cheque is usually provisional in nature. The cheque may still be returned, or dishonoured, by the bank on which the cheque is drawn, leaving the bank that provided provisional credit in respect of the cheque with recourse to recover such amount from its client.

These guiding principles of the cheque payment process were recently considered by the Ontario Superior Court of Justice in Re*Collections Inc v The Toronto-Dominion Bank.1 The plaintiffs in this action moved to certify a class action against three of Canada’s six major banks (the “Banks”). In the proposed class action, the plaintiffs sought to recover profits that the Banks allegedly earned at their customers’ expense through use of the proceeds of held cheques between the time that cheques were deposited by their customers and the time that the proceeds of the cheques were made available to the customers.

Sales Thought – An Early Lesson

by Nick Miller of Clarity Advantage

In which we are reminded to focus first on relationship and value demonstration, then on the commissionable task.

On a spring afternoon long decades ago, we sat almost knee to knee in a hotel lobby after a sales and marketing conference we’d both attended. She, leaning back, almost lounging, on a hotel lobby couch. I, sitting on the edge of an arm chair, facing her, leaning forward. She reached into her purse, fished around, and pulled out a pencil.

“Sell me this.” Her eyes barely moved.

I looked at the pencil. It was a standard yellow wood #2 pencil that, in her hand, looked as big as a shovel.

“Come on,” she purred, extending her pencil-bearing hand toward me. “Sell me this pencil. It can be anything you want.”

The Ideal Business Banking Account Manager

Here are a few characteristics of the ideal banking account manager for a business, based on feedback from the businesses I work with:

  • Returns your calls promptly
  • Answers your questions with clarity and authority
  • Always has time to consult with you about your needs and performance
  • Suggests techniques for innovative loan structuring

Sales Thought – Home Ice

by Nick Miller of Clarity Advantage

In which we are reminded that, to win in a competitive situation, we need to build our fan base inside our prospects’ organizations well before we make our move to sell.

The Boston Bruins (National Hockey League defending Stanley Cup champions this year) began their training camp last Friday.  The seventh (final) game of their 2011 Stanley Cup series against the Vancouver Canucks was electrifying hockey, whether one was rooting Bruins or Canucks, and Boston’s win at the end was a surprise because… .through the first six games, each team had won on its home ice,  the seventh was game was played in Vancouver, and, in the National Hockey League, home teams win 59% of the time. Home ice advantage.  Fifty-nine percent!

Shocked?  Well hang on. If you’re a National Basketball Association fan, home teams win 62.7% of the time.  Almost TWO THIRDS of the games are won by home teams.  Home court advantage. And it’s about the same in the WNBA as well. Amazing, eh?

Sales Thought – Matted Down

by Nick Miller of Clarity Advantage

In which we are reminded to follow our “broad” questions with very specific questions that tease out the detailed facts we need to propose value-based solutions.

With apologies to y’all in Texas and other states who haven’t had rain or grass for a couple of years:

I mowed our  lawn on Saturday. Beautiful day for mowing, just a little bit of cool fall air with brilliant September sunshine.   Thanks to recent rains and the fall dose of lime and fertilizer, our lawn is thickly green, punctuated with early fall leaves.

One small hitch in the giddy-up.  The ride-on lawn mower we use for grass and leaves at this time of year features wide front and rear tires that matt down the grass so that the mower blades ride over the matted grass which can get pretty long, even when we’re mowing weekly. So, after we mow, we rake portions of the grass, teasing up the matted down long bits so that we can clip them with hand-clippers or mow them with the standard rotary mower.