Commercial Financing & Mortgage Registrations

Securing financing for a commercial property acquisition, development, or refinancing is a complex legal undertaking. Commercial mortgages and secured lending arrangements involve sophisticated documentation, multi-party negotiations, and strict registration requirements. At Goldstone Law Professional Corporation, we act for both institutional and private lenders, as well as borrowers, in all types of commercial financing transactions across Ontario. Our commercial financing legal services are designed to ensure that every loan is properly documented, every security interest is validly registered and correctly prioritized, and every client — lender and borrower alike — fully understands their rights and obligations under the financing arrangement.

Types of Commercial Financing We Handle

Commercial Mortgage Financing

A commercial mortgage is a loan secured by commercial real property. Commercial mortgages are used to finance the purchase, refinancing, or development of office buildings, retail properties, industrial facilities, multi-residential apartment buildings, and mixed-use projects. We prepare and review commercial mortgage documentation, including the charge/mortgage instrument, commitment letters, personal guarantees, and environmental indemnities, and register the mortgage electronically through Teraview.

Construction Financing

Construction financing involves a line of credit or multiple advance mortgage that funds the construction of a new building or the major renovation of an existing property. Construction loans are typically advanced in stages (draws) as construction milestones are completed. We act for lenders and borrowers in construction financing transactions, preparing the mortgage documentation, reviewing draw conditions, and ensuring that the lender’s security is properly maintained throughout the construction process. Construction liens are a significant risk in this context, and we advise clients on lien holdback requirements under the Construction Act (Ontario).

Bridge Financing

Bridge financing provides short-term capital to bridge a gap between two transactions — for example, where a borrower needs funds to close a purchase before the sale of their existing property is complete. Bridge loans typically carry higher interest rates and fees but provide essential liquidity for time-sensitive transactions. We prepare bridge financing documentation efficiently to meet the tight timelines typical of these arrangements.

Mezzanine and Second Mortgage Financing

In larger commercial transactions, borrowers may supplement first mortgage financing with mezzanine financing or a second mortgage. These subordinated financing arrangements require careful documentation of priority arrangements and may involve an inter-creditor agreement between the first and second mortgage lenders. We advise both senior and subordinated lenders on the structuring and documentation of these arrangements.

FSRA Compliance for Mortgage Lenders

Mortgage lenders and brokerages in Ontario are regulated by the Financial Services Regulatory Authority of Ontario (FSRA) under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA). Private lenders who lend through mortgage brokerages, as well as mortgage investment corporations (MICs), are subject to certain regulatory requirements. We advise private lenders on their compliance obligations and ensure that lending transactions are structured in accordance with applicable regulatory requirements.

General Security Agreements and PPSA Registrations

In addition to mortgage security over real property, commercial lenders often require security over the personal property of the borrower, including accounts receivable, inventory, equipment, and intellectual property. This type of security is created by a General Security Agreement (GSA) and registered through Ontario’s PPSA (Personal Property Security Act) registry. We prepare GSAs and conduct and register PPSA security interests to ensure that lenders have comprehensive security over all assets of the borrower’s business.

Frequently Asked Questions — Commercial Financing & Mortgage Registrations

What is a commitment letter and is it binding?

A commitment letter is a document issued by a lender setting out the proposed terms of a loan, including the principal amount, interest rate, repayment schedule, security requirements, and conditions to funding. While a commitment letter is generally intended to be binding on both parties once accepted, it typically contains conditions precedent — requirements that must be satisfied before the lender is obligated to advance funds. We review commitment letters carefully to identify any conditions that may be difficult to satisfy and advise clients on the implications before they accept.

Can a private lender charge any interest rate they wish in Ontario?

While private mortgage lending in Ontario is less regulated than institutional lending, there are still legal constraints on interest rates. Canada’s Criminal Code prohibits charging an effective annual interest rate in excess of 60 percent. Additionally, certain terms in a lending arrangement — such as excessive default interest rates or onerous prepayment penalties — may be subject to challenge. We advise private lenders on structuring their loan terms to be commercially competitive while remaining legally enforceable.

Contact Goldstone Law for experienced commercial mortgage and financing legal services. We act for lenders and borrowers in commercial financing transactions throughout Ontario.