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Canada Small Business Financing Regulations

Version of section 26 from 2006-03-22 to 2009-03-31:

 Notwithstanding that the requirements with respect to guarantees and suretyships set out in sections 19 to 22 were not satisfied in respect of a loan, the Minister must pay to the lender the amount of any loss, calculated in accordance with subsection 38(7), sustained in respect of the loan if

  • (a) the loss was not affected by the non-compliance and the non-compliance was inadvertent; and

  • (b) the aggregate amount recovered from the realization of personal guarantees and suretyships, if any, is not greater than the sum of

    • (i) 25% of the original amount of the loan,

    • (ii) interest on any judgment against the guarantor or surety,

    • (iii) taxed costs for, or incidental to, the legal proceedings against the guarantor or surety, and

    • (iv) legal fees and disbursements — other than costs referred to in subparagraph (iii) — and other costs incurred by the lender for services rendered to it by persons other than its employees for the purpose of the legal proceedings against the guarantor or surety.

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