A few weeks ago the Bank of Canada raised its key lending rate for the first time in seven years by a quarter-percentage-point. Although a move like this signals a growing confidence in the Canadian economy, not everybody shares this excitement.
For lenders, it can make the business of lending a bit more enticing, but for borrowers, an interest rate increase is not news that makes you want to call home. With concerns that this increase could ultimately hurt consumers who are already stretched too thin, it is a good reminder for lenders and creditors to secure their loans to protect themselves against borrowers who are unable to pay off all or part of their debt.
In Ontario, the Personal Property Security Act (PPSA) is a statutory regime that governs the taking of and enforcement of security in the property of a borrower. If you are a lender, by registering with the Personal Property Security Registration (PPSR) system, it will help you secure your loan interests and help establish priorities between you and other lenders with competing interests in the same debtor property, to protect you in the event the borrower does not pay.
We always recommend our clients who are lenders to secure their interests using the PPSR system rather than risk being an unsecured lender with no protection to secure repayment of their loan. Please feel free to connect with us if you would like to learn more about this regime or if you would like help in becoming a secured creditor.
Michelle Eames, LL.B, LL.M.