After the Money Lending Amendment Act 2021, most of Ireland’s consumer laws were brought into line with international standards and the Money Lending Amendment became a deadlock for all commercial businesses. However, there are some important exemptions which are allowed to continue and this is why it is necessary for businesses to know what they are up against before taking on any business with the Money Lending Amendment. This is because the Money Lending Amendment Act 2021 did away with the freedom of consideration which was one of the main features of the previous Money Lending Acts. The Money Lending amendments target the Money Lending Companies Control and Regulations Law (the Money Lending Business Control and Regulation Law as described above) and not the Law Concerning the Regulation of Receiving Commercial Guarantees.
There are a few different types of business which are qualified for the Money Lending Guarantee. First, the qualified companies must be companies which trade in securities like bonds, shares or mortgages and use commercial capital to meet their expenses and needs. Second, if the money lending company is a member of either the CMHC or the Mortgage Broker Dealers Association, then the qualified company must have its office located in the respective areas of CMHC and the Broker Dealers Association. Money Lending Guarantees may be provided for a single commercial purpose like acquisition of commercial investment property or refinancing an existing commercial property or for multiple purposes like property improvements or growth in an area of investment property. In fact, in some instances, the Money Lending Guarantee may also cover the acquisition of land for development purposes.
There are some differences between the Money Lending Guarantees and the Hard Money Lending Guarantees and these differences become apparent when comparing the requirements of both the Money Lending Guarantee and the Hard Money Lending Guarantee. Whereas the hard money lending guarantee is strictly limited to the purchase and sale of residential lots and the hard money lending is broader in its requirements, both types of Lenders Guarantees have similar procedures to qualify an investor for a loan. The investor must first submit a comprehensive proposal to both companies in order to receive an estimate of the amount that he or she will be able to borrow from either company. Then, the proposal is subject to close negotiations between the buyer and the lender. Once the deal is sealed, the investor will receive a guaranteed amount of money from the lender in exchange for the right to buy the property.