Service standards loan taking
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Your AccountYou are to recover your fees and disbursements from the loan disbursements or directly from the borrower before releasing the final disbursement. Unless specifically otherwise approved, BDC will not pay your account. We require a copy of your account in all cases. Loan AmendmentsFrom time to time, amendments to our loans will require that supplemental security be prepared. We will send you an Instructing Letter enclosing the amendment requiring the supplemental security, as well as any other documents you may need to prepare the additional security. In accordance with our reporting requirements in Section 7, we require electronic versions of the completed security documents and the Solicitor’s Report not later than 30 days after the security has been completed. Please indicate in the Solicitor’s Report which sections are not applicable to the completed security. The outstanding balance of all loans being amended will be provided in the Instructing Letter. Where the total outstanding balance exceeds $5,000,000, you are expected to provide opinions as to capacity, authorization and execution for corporations and all non-corporate entities (partnerships, trusts, etc.) granting the supplemental security required by the loan amendment. Do not provide opinions for any other loan parties. You are to recover your fees for all amendment work directly from the borrower or the borrower’s solicitor, as there will be no loan disbursement from BDC for amendments. You do not need to send a copy of your account for loan amendment work with your Solicitor’s Report. PART II –Security Taking Topics – Atlantic and Ontario Miscellaneous TopicsMultiple JurisdictionsWhere you are instructed to take security on a loan where there is security in more than one province we anticipate you will use local law firms as required but look to you to ensure the required security is taken. BDC will not instruct firms in each jurisdiction. Where you are instructed to take security on a loan where a foreign corporation is giving security and a foreign opinion is required, we anticipate that you will use local law firms as required but look to you to ensure the required security is taken. BDC will not instruct a firm in the foreign jurisdiction. The exception to the foregoing is if BDC’s loan is to specifically finance a project in the U.S, in which case, we will require that specific U.S. counsel be used. If the loan falls into this category, the S&D Officer will advise you and provide you with the contact information for the U.S. counsel to be used. Insurance on AssetsThe Letter of Offer sets out the required insurance policies and terms thereof (if any). Although the borrower is required to insure its assets for their full insurable value under the terms of the Letter of Offer, we do not require you to verify insurance is in place in all cases. You are required to verify insurance for all charged assets for loans over $500,000. For loans up to and including $500,000, you are only required to verify insurance for: Buildings; Aircraft; and Marine vessels. A certificate of insurance issued to BDC for each applicable type of insurance is required prior to the first disbursement. The name on the certificate(s) must match the name of the customer (or guarantor owning the secured assets). The address and descriptions of insured property(ies) must match the addresses and descriptions of assets pledged as security. The certificate(s) of insurance must include the following general information:
Forwarding Insurance Certificates Please forward to the S&D Officer certificates or policies relating to aircraft or marine vessels as soon as possible. For all other types of insurance, a copy of the certificate of insurance must be included with delivery of the security documents and your report to Legal Services. BDC’s requirements for the applicable types of insurance are as follows: PROPERTY (building and equipment): This insurance is required when BDC has taken realty, equipment and/or business inventory as security. Coverage must include: Building and equipment insured on an “All Risks or Broad Form”, full “Replacement Cost” basis BDC included as Mortgagee as its interests may appear “Standard Mortgage Clause (Approved by the Insurance Bureau of Canada)” in favour of BDC for all realty (buildings) BDC included as Loss Payee for equipment/contents as its interests may appear 30 days prior notice of cancellation clause in favour of BDC. The clause is acceptable even if only “endeavour to provide” Note: Condominiums – Insurance should be confirmed both for the building policy held by the condominium corporation and for the owner’s policy covering the unit contents. BDC is only required to be named as loss payee on the owner’s policy. The Loss Payee and Standard Mortgage clause are not required on the condominium corporation policy. PROPERTY (building and equipment) located outside of Canada BDC’s Operational Risk Management (“ORM”) Department is responsible for verifying the Insurance coverage on secured property located outside of Canada. Please forward Certificates of insurance to BDC’s S&D Officer for review by the ORM Department as soon as possible. EQUIPMENT BREAKDOWN (Boiler & Machinery): This insurance is required when a building pledged as security has pressure vessels for heating and/or other process machinery and equipment. Coverage must include: Standard Comprehensive All-Risks or Broad Form, Repair or Replacement Cost basis BDC included as Loss Payee as its interests may appear 30 days prior notice of cancellation clause in favour of BDC BUILDERS’ RISK OR COURSE OF CONSTRUCTION: This insurance is required to cover loss or damage to buildings while they are under construction for construction loans. The construction contract should specify which party is responsible for procuring the insurance; it can be the future owner of the completed building, the project manager or the general contractor. Coverage must include: Building and equipment insured on an All Risks or Broad Form, Replacement Cost basis, including coverage for Soft Costs BDC included as Mortgagee as its interests may appear Standard Mortgage Clause (approved by the Insurance Bureau of Canada) in favour of BDC for all realty (buildings) BDC included as Loss Payee for equipment/contents as its interests may appear 30 days prior notice of cancellation clause in favour of BDC Note: The amount of insurance should reflect the construction costs as well as the soft costs such as architectural and engineering fees. Evidence of property insurance is required once construction has been completed. TRANSPORTATION RISK (CARGO): This insurance covers loss or damage to property while in the course of transportation and is required when BDC calls for a charge on equipment and the amount disbursed on equipment in transit will exceed $500,000. Coverage must include: Property transported and insured on an All Risks, Replacement Cost basis, including loading or unloading, covering any and all modes of transport used BDC as Loss Payee as its interest may appear 30 days prior notice of cancellation clause in favour of BDC (not relevant if the coverage is arranged for a single voyage or trip and is imminent) MARINE: This insurance is required when a marine vessel is pledged as security. A copy of the certificate of insurance must be provided to the S&D Officer for forwarding to our ORM Department – Insurance for review prior to disbursement. Coverage must include: Marine vessels insured for full value of the vessel under a Standard Hull & Machinery insurance clause in customary use for the occupation of the vessel BDC included as Loss Payee as its interests may appear Mortgagee Interest Clause in favour of BDC (required for vessels with a Current Liquidation Value (CLV) ≥ $500,000). The S&D Officer can advise you as to the CLV) Protection & Indemnity (third party liability) coverage in the minimum amounts of: $1,000,000 for pleasure craft $2,000,000 for commercial use or as required by Transport Canada or as specified in the Letter of Offer BDC included as an Additional Insured (should be requested but may not be available if the vessel insured through a P&I - protection & indemnity club) 30 days prior notice of cancellation clause in favour of BDC. The clause is acceptable even if only “endeavour to provide” AVIATION: This insurance is required when an aircraft is pledged as security. A copy of the certificate of insurance must be provided to the S&D Officer for forwarding to our ORM Department – Insurance for review prior to disbursement. Coverage must include: Aircraft hull insured on an “All Risks” basis for the full value of the aircraft Hull War Risk and Related Perils (required if aircraft operated outside Canada/USA) Insurance to include “In-Flight” coverage Third Party Liability (including passenger) coverage in the minimum amounts of: (refer to Aircraft Schedule B – General Security Agreement): $1,000,000 for private aircraft $2,000,000 for commercial use plus $1,000,000 per passenger or as required by Transport Canada or as specified in the Letter of Offer BDC included as an Additional Insured (should always be requested but may not always be available for small private aircraft) Breach of Warranty clause in favour of BDC BDC included as Loss Payee as its interests may appear 30 days prior notice of cancellation clause in favour of BDC. The clause is acceptable even if only “endeavour to provide” BDC will accept AVN67C or AVN28B or equivalent Note: Breach of Warranty clause provides protection to BDC similar to the Standard Mortgage Clause in Property insurance. AVN67C and AVN28B are endorsements available in the London market for leased/financed aircraft. AVN67C is used for Airline operations while AVN28B applies to commercial general aviation risks. They include the Loss Payee, Breach of Warranty, and cancellation clauses. AVN67C also includes Additional Insured clause for financiers. If aircraft is grounded, coverage must include liability insurance for ground risk. This is referred to as Static Liability. AVIATION GENERAL LIABILITY: Clients that operate aircraft hangars that provide fuelling, maintenance and/or repair services to third parties must provide evidence of this insurance. Coverage must include: $1,000,000 limit of Hanger Keepers liability per occurrence or the maximum value of aircraft in the hangar at any one time Aviation Products Liability in the minimum amount of $1,000,000 per occurrence and in the annual aggregate BDC included as an Additional Insured 30 days prior notice of cancellation clause in favour of BDC MOTOR VEHICLES: This insurance is required when motor vehicles are pledged as security. Coverage must include: “All Risks” physical damage or “Collision and Comprehensive” coverage Automobile liability in the minimum amount of $1,000,000 per occurrence Lien Holder Endorsement naming BDC as Loss Payee (should be requested but may not always be available – e.g., government owned car insurance entities will not typically provide this) 30 days prior notice of cancellation clause in favour of BDC. The clause is acceptable even if only “endeavour to provide” Directory: documents documents -> Concept stage documents -> Concept stage documents -> The great global switch-off documents -> Nonprofit grant application documents -> The Truth about the Rwandan Genocide documents -> Annual InStructional unit plan documents -> Chaos equipment included Download 397.92 Kb. Share with your friends:
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