Kicker provision

A kicker provision is a clause in a loan or investment agreement that gives the lender or investor an extra return on top of the base return, such as a share of profits, sale proceeds or equity. It is payable on performance or success, not as a penalty for breach.

How BC law treats it

Because a kicker is an agreed return rather than a sum payable on breach, the penalty doctrine does not apply to it. A kicker may, however, count as interest under the criminal interest rate provision in s. 347 of the Criminal Code, which since January 1, 2025 caps most loans at 35% APR, subject to exemptions for commercial loans to borrowers that are not individuals. Consumer protection legislation such as the Business Practices and Consumer Protection Act, SBC 2004 c 2 does not apply to commercial financing between businesses.

What it means for your business

A BC business agreeing to a kicker should model its cost under different exit scenarios.

Risks and common mistakes

Poorly defined trigger events or calculation formulas often lead to disputes about whether, and how much, the kicker is payable.

For the full explanation, see our entry on Equity kicker.

General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.