Banks have a rigorous and set list of specific criteria such as requiring documentation of cash flow, credit bureau reports, TDS/GDS ratios, geographic areas, and more. If a borrower struggles to meet any of these criteria they will be declined. We are an equity lender and as such our primary focus is on borrower’s experience and cash equity instead. Because the banks have a tight snapshot of what they deem acceptable, they open up new markets for private lenders like Benson.
Every single investment must be unanimously approved by our board of directors. All loans are reviewed and underwritten in house.
A “Mortgage Investment Corporation” is a company able to ascertain non-taxable status under Section 130.1 of the Canadian Income Tax Act. They are comprised of a group of members who pool their money by purchasing shares in the mortgage investment corporation. MIC’s can borrow from any bank or other lender using the stakeholder’s capital and or loan proceeds to support a mortgage portfolio.
You can simply redeem your shares for the subscription price paid. Redemption requests are processed every quarter with advanced notice required. If funds are not available the shareholder will need to wait until the following quarter funds are available for redemption.
Shares are eligible for differed investment plans such as RRSPs and RPPs. They are good candidates for registered plans since they don’t require tax payment when its income is dispersed as dividends while plans don’t pay any tax when they receive them.
Dividends will be stable and paid out to each shareholder on a monthly basis, providing substantial regular income.
MIC’s can deduct from its own returns, all amounts paid to its stockholders as taxable dividends. Therefore, an MIC is a conduit and therefore non-taxable.
Because MIC’s are involved with a large pool of capital, shareholders are secured by many mortgages which therefore reduces the risk. Keep in mind, as with any investment there are risk factors, although they are mitigated by conservative lending strategies employed at Benson.
Benson can provide the paperwork you need to bring over your account to us. All of the investments in the existing portfolio can be transferred to us, and managed by our professional teams.