Document background
The Loan Extension Agreement is utilized when parties to an existing loan arrangement wish to extend the loan's maturity date beyond its original term. This document is essential in Canadian lending practice when borrowers require additional time to repay their loans, but the fundamental lending relationship remains sound. It typically becomes relevant as the original loan maturity date approaches and both parties agree to continue the lending relationship. The agreement must comply with Canadian federal legislation such as the Interest Act and Bank Act, as well as provincial contract laws and consumer protection regulations where applicable. The document includes critical information such as the new maturity date, any modified payment terms, confirmation of existing security arrangements, and conditions precedent to the extension becoming effective. It's particularly important in commercial lending, real estate financing, and corporate borrowing scenarios where loan modifications need to be properly documented to maintain legal enforceability and regulatory compliance.
