Our Kelowna office routinely acts as counsel for lenders in commercial financing transactions. When asked to do so, we prepare the financing packages for the lender’s clients. We work with the borrower’s counsel to facilitate the timely and efficient delivery of financing documents, review of signed documents and delivery of loan proceeds.
Our Kelowna law office also works with our clients when they require commercial financing to assist in a purchase or a business acquisition, or simply to assist in obtaining additional operating capital or cash flow. A commitment to finance the transaction should always be obtained by a buyer prior to the buyer removing the financing condition in the buy/sell agreement. Deposits normally become non-refundable once subjects are removed, so if financing is not secured prior to removing the conditions, the buyer puts the deposit funds, and potentially more, at risk of claim by the seller should the buyer not complete. As the financing documents must be prepared by another law firm in a commercial transaction, the buyer should ensure that sufficient time is available to allow for the other lawyer to receive instructions from the lender, prepare the documents, deliver them to us, then review when signed documents are received. Lawyers for lenders will never release any funds until 100% of the funding conditions are met so obtaining the financing commitment, the document which sets out the conditions the buyer must meet to receive the funds, should be a priority for a buyer that will rely on the financing to complete the purchase. The lender may require the production of documents that may take time for the buyer to obtain, or which may require the buyer to retain the services of third parties whose schedules may not permit immediate action on the buyer’s behalf.