Pay Dirt Series – Why the Fuss about CRA?

You may have noticed a lot of questions from your lender about CRA if your borrower is Business for Self.  There’s a reason for this.

The big one is GST.  If your borrower is behind (or not remitting at all when they should be), these sums can rank ahead of a mortgage even though they’re not registered on title.  What this means to a lender is that there needs to be as much certainty as possible that at closing, all sums owing to CRA for GST have been paid.

The requirements for proof of this will vary from lender to lender.  It may be a letter from an accountant, a printout of their regular GST remittances, or maybe something else.

This applies not only to sole proprietors but also to incorporated businesses since directors of companies can be liable for the GST of their companies.

When meeting with a Business-For-Self borrower, it’s a good idea to get them going on putting this information together, because you’ll likely need it when the lender reviews their application.