What can I do if my lender is slow to release the funds on closing day?

A late loan advance on closing day leaves the buyer in an awkward spot: the seller is ready, the lawyers are waiting and the buyer’s money is in someone else’s hands. The first useful fact is who holds it. Under the Canada Small Business Financing Program, financial institutions make the loans and the government shares the risk with them, so the decision to advance sits with the lender.

Ask what is outstanding, in writing

Ask for the open items as a list, with who owes each one, and send the request through your lawyer if the lender’s lawyer is involved. Under the program’s guidelines the lender must make sure its security is valid and enforceable as of the first advance, so security documents and registrations are among the things it must have right before money moves. Other lenders set their own conditions, but the request is the same.

Look for a lien nobody discharged

Ontario’s Access Now page explains that a personal property search can show that the seller or a previous owner took a loan and that the lender may have rights in the property, and that a repaid loan should have a discharge registered before the sale is completed. A lender taking security over the same assets may need an old registration cleared first, which is a question for its lawyer. Other provinces keep their own registries; Alberta’s government, for one, advises searching before buying personal property.

Check what your agreement allows

A delay is not automatically a breach by anyone, but it can become one if the agreement fixes the closing date firmly. Find the closing date clause, whether the parties can move it in writing, and what happens if funds are late. A short written extension signed by both sides keeps the record clear. Letting the date pass without one is the situation covered in can the seller keep my deposit if I back out.

Give the lender the file early next time

BDC says a business-purchase applicant provides the agreed price and how it was determined, the transaction structure, a letter of intent and the expected closing date. Sending the signed agreement and the closing date the day they exist, and asking when the lender needs everything by, moves surprises away from closing day itself.