Home equity loans
A home equity loan is a loan secured against the owner's equity in a home, usually by a second mortgage or a home equity line of credit registered against title. The lender can enforce against the property if the borrower defaults, so the home is at risk if payments are not made.
How BC law treats it
Banks are federally regulated under the Bank Act, while credit unions and provincially incorporated trust companies are regulated by the BC Financial Services Authority; mortgage brokers are separately registered in BC. There is no general BC statutory cooling off period for mortgage loans, but cost of borrowing disclosure rules apply.
What it means for your business
Owners who use home equity to fund a business put their personal residence behind the business's debts.
Risks and common mistakes
If the business fails, the lender can bring foreclosure proceedings against the home even though the money was used for business purposes.
Browse the full Fulcrum Law Dictionary for related terms.
General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.
