Private Lending & Secured Financing

Private lending plays a major role in Ontario’s commercial real estate and business finance market. Many acquisitions, refinances, bridge transactions, redevelopment projects, and time-sensitive commercial closings would not move forward without private capital. But flexible funding does not mean simple funding. Private lending and secured financing transactions often involve customized loan terms, layered security packages, tight timelines, and heightened risk. At Goldstone Law Professional Corporation, we act for private lenders and borrowers in commercial private lending matters across Ontario, helping structure, document, register, and close secured financing transactions with clarity and precision. Whether the financing is secured by commercial real property, business assets, or both, the legal work must align with the actual economics of the deal. A lender needs enforceable security and a clear priority position. A borrower needs to understand the repayment obligations, fees, default terms, and practical consequences of the security being granted. Our role is to protect our clients at each stage of that process.

What Private Commercial Lending Looks Like

Commercial private lending can take many forms. It may involve a first mortgage on a commercial property, a second-position bridge loan, a construction or redevelopment facility, mezzanine financing, a short-term advance to stabilize a property before conventional financing, or a secured business-purpose loan supported by both real property and personal property collateral. In many cases, private commercial loans are used because the transaction requires speed, flexibility, or underwriting terms that traditional institutional lenders are unwilling or unable to provide.

Those advantages come with complexity. Private commercial loans are typically negotiated on bespoke terms rather than standardized forms. That makes the documentation and security review especially important. A transaction that seems straightforward at a business level may involve multiple secured parties, existing mortgages, PPSA security, guarantees, assignment of rents, inter-creditor considerations, or regulatory issues that need to be addressed before funds can safely be advanced.

Acting for Private Lenders

When we act for a private lender, our focus is on protecting the lender’s position before, during, and after closing. We review the proposed transaction structure, assess the available security, examine existing encumbrances, and prepare the mortgage and supporting documentation to reflect the actual commercial bargain. Where the deal includes both land and personal property collateral, we coordinate the appropriate registrations so the lender’s security package is coherent rather than fragmented.

We also review issues such as priority, payout requirements, borrower covenants, events of default, guarantees, and enforcement rights. In commercial lending, the quality of the security package matters every bit as much as the headline interest rate. A well-documented deal can help avoid future disputes and strengthen the lender’s position if the loan must later be enforced, renewed, or restructured.

Acting for Borrowers

Borrowers in private lending matters need legal advice just as much as lenders do. Commercial private financing can be an effective tool, but it often includes shorter maturities, higher interest rates, tighter reporting obligations, broader default clauses, and more aggressive enforcement language than institutional financing. A borrower should understand exactly what obligations are being assumed and what assets are being put at risk.

When we act for borrowers, we review the commitment terms, mortgage, guarantees, and related security documents so the borrower has a realistic understanding of the financing package. We explain how the repayment structure works, what happens if the loan is not repaid at maturity, whether renewals are discretionary, and how default interest, fees, and remedies may operate in practice. That advice helps borrowers make informed decisions before the deal closes rather than after problems arise.

Security Over Real Property and Personal Property

Commercial secured financing often extends beyond a mortgage on land. A lender may require additional security over rents, leases, accounts receivable, inventory, equipment, chattel paper, general intangibles, or other business assets. In Ontario, that type of personal property security is typically documented through a General Security Agreement and perfected through PPSA registration, while real property security is addressed through land registration.

This dual-security structure is common in commercial lending because the property alone may not tell the full economic story of the loan. A lender financing an operating business, tenanted building, or income-producing property may want security over both the real estate and the business assets that support revenue generation. We help clients build and understand those layered security packages properly.

Priority, Existing Debt, and Inter-Creditor Issues

One of the most important questions in private secured financing is where the lender will rank. Is the loan intended to be first position on title? Is it subordinate to an existing institutional lender? Is there another secured party with PPSA registrations already in place? Are postponements, non-disturbance arrangements, or inter-creditor agreements required?

Priority problems are much easier to address before closing than after default. We review title, search existing security registrations where appropriate, and assess what documentation is needed to achieve the intended security position. For borrowers, this also helps avoid assumptions about what a lender is getting and what prior obligations remain in place. For lenders, it helps ensure the expected risk profile of the deal is legally supportable.

Commitment Letters and Loan Documentation

A commercial private loan is often negotiated quickly, but the commitment letter should still be reviewed carefully. The commitment usually sets out the principal amount, interest rate, lender fees, brokerage fees if applicable, security requirements, conditions to funding, maturity date, reporting obligations, and default framework. Once accepted, it often becomes the roadmap for the rest of the transaction.

We assist with the review and preparation of commitment letters, mortgage terms, guarantees, indemnities, assignment of rents, postponements, General Security Agreements, direction regarding funds, and related loan documents. In well-run transactions, the registered security and supporting contractual documents work together. In poorly documented files, the documents may conflict, leave gaps, or create uncertainty precisely where clarity is most needed.

Regulatory Considerations

Commercial private lending does not exist outside Ontario’s regulatory framework. Depending on how the transaction is sourced and structured, the Mortgage Brokerages, Lenders and Administrators Act, 2006 may be relevant, particularly where mortgage brokerages, administrators, or other regulated participants are involved. We help private lenders understand the legal environment in which the transaction is being documented and closed, including whether additional compliance or disclosure steps may need to be considered.

This is especially important for repeat lenders, mortgage investment entities, and participants who are active in the market rather than advancing a one-off loan. Sound documentation is important, but sound process matters too.

Bridge Loans, Redevelopment Loans, and Urgent Closings

Private commercial lenders are often brought into transactions because time matters. A borrower may need to close on a purchase before long-form conventional financing is in place. A property owner may need funds for a short-term redevelopment step, tenant improvement cycle, tax issue, or capital event. A maturing loan may need to be replaced quickly to avoid default.

These files demand speed, but speed should not come at the expense of legal discipline. We are accustomed to acting on urgent financing timelines while still ensuring that title is reviewed, the security package is documented, and the flow of funds is properly managed through trust. Efficient execution is one of the main reasons clients use private lending; our job is to make sure that efficiency is backed by solid legal work.

Our Private Lending & Secured Financing Services Include

• Acting for private lenders in commercial mortgage and secured financing transactions
• Acting for borrowers in reviewing loan terms, security, and closing obligations
• Preparing and reviewing commitment letters, mortgage documents, guarantees, and ancillary security
• Registering commercial mortgages and related land-based security
• Preparing General Security Agreements and related PPSA security documentation
• Reviewing title, priority, and existing encumbrances
• Advising on inter-creditor, postponement, and multi-lender issues
• Managing funding and trust-side closing steps for secured commercial loans

Frequently Asked Questions — Private Lending & Secured Financing

What is the difference between a commercial private loan and a bank loan?

A commercial private loan is usually more flexible and faster to arrange, but it often comes with higher pricing, shorter terms, and more customized documentation. Bank loans tend to be more standardized and institutionally underwritten, while private loans are often negotiated deal by deal.

Can a commercial private lender take security over both land and business assets?

Yes. That is common in commercial secured lending. A lender may take a mortgage over real property and additional security over personal property, such as accounts, equipment, inventory, rents, or other business assets, depending on the structure of the transaction.

Why does priority matter in a secured financing transaction?

Priority affects the order in which secured parties may be paid or enforced against collateral. A lender expecting first-position security should not assume that outcome without proper title and security review. Priority is one of the most important legal issues in any commercial financing file.

Do borrowers need a lawyer in a private commercial lending transaction?

They should. Borrowers need to understand the financing structure, repayment obligations, guarantees, fees, events of default, and enforcement risk before the deal closes. Good borrower-side advice can prevent serious misunderstandings later.

Contact Goldstone Law for experienced commercial private lending and secured financing support. We help lenders and borrowers across Ontario structure the deal properly, document the security clearly, and close with confidence.