Investing FAQ

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Who is the Company’s Auditor?

At the end of every fiscal year, the MIC and EMD is audited by KPMG.

How long has the MIC been operating?

The MIC began operating in 2007.

What is the minimum investment to participate in the MIC?

The minimum initial investment in the Company is $25,000. The minimum subsequent investment is $5000.

What is the expected return of the MIC?

The company doesn’t guarantee returns, but management targets yields in the 6-10% range. Please see company’s results history.

What happens when a mortgage goes into foreclosure?

Defaults and foreclosures are a normal part of the private lending business. The Company works with our foreclosure lawyers to ensure the best resolution for shareholders. Foreclosing on a property does not necessarily result in a loss. In the majority of cases there is full recovery of all principal, interest and expenses. The MIC has not lost any principal, interest or fees on any foreclosure since company inception.

Are there restrictions on how a MIC operates?

A MIC must have at least 20 shareholders.

A MIC is generally widely held. No shareholder may hold more than 10% of the MIC’s total capital.

At least 50% of a MIC’s assets must be residential mortgages, and/or cash and insured deposits at Canada Deposit Insurance Corporation member financial institutions.

A MIC may invest up to 25% of its assets directly in real estate, but may not develop land or engage in construction. This ceiling on real estate holdings does not include real estate acquired as a result of mortgage default.

A MIC is a flow-through investment vehicle, and distributes 100% of its net income to its shareholders.

All MIC investments must be in Canada, but a MIC may accept investment capital from outside of Canada.

A MIC is a tax-exempt corporation.

Dividends received with respect to directly held shares, not held within RRSPs or RRIFs, are taxed as interest income in the shareholder’s hands. Dividends may be received in the form of cash, or additional shares.

MIC shares are qualified RRSP and RRIF investments.

A MIC may distribute income dividends, typically interest from mortgages and revenue from property holdings, as well as capital gain dividends, typically from the disposition of its real estate investments.

A MIC’s annual financial statements must be audited.

A MIC may employ financial leverage by using debt to partially fund assets.

When can I invest?

Subscribers may invest on a quarterly basis, we would require paperwork completed and funds received before the following dates:

March 1st
June 1st
September 1st and
December 1st.

Please contact us for further details.

Is my investment secure?

Every mortgage loan is adjudicated by an experienced Credit Committee following the company’s established underwriting process. Each mortgage investment is secured by a registered mortgage on title, earthquake and fire insurance, environmental reports, credit reports and any additional due diligence deemed necessary to protect investor capital.

How do I access my account online?

The MIC uses an online client platform called Exempt Edge. Shareholders have the ability to view statements, relevant documentation and ability to sign forms.

How do I withdraw funds if needed?

Under the Offering Memorandum, you must provide 90 days’ notice prior to August 31st to withdraw your shares. The MIC may consider requests for redemption on a quarterly basis with 30 days’ notice prior to March 1, June 1, September 1 & December 1.

How can I Invest?

To buy private capital on the “exempt market” you have to qualify for an exemption from the prospectus requirement. A PHL Financial Group Dealing Representative will complete a Know Your Customer, Anti-Money Laundering and Suitability form to help you determine whether or not you qualify for one of these exemptions.

If this investment is deemed suitable for you, the minimum initial investment in the “MIC” is $25,000. The minimum subsequent investment is $5,000.

The MIC is a qualified investment for all self-directed registered (RRSP, RRIF, LIRA, LIF, RESP & TFSA) and non-registered (Personal & Corporate) accounts. Please contact us and we will be able to assist you with your investment or to answer any other questions you may have.

What is an Exempt Market Dealer (“EMD”)?

An EMD is a firm that has been licensed to distribute investment securities that haven’t been qualified by a prospectus, but are exempt from the prospectus requirement based on the rules and regulations of each province where the EMD is registered to carry on business. These investments are often referred to as “private capital” because they aren’t publicly traded like other stocks and securities.

An EMD has regulated standards that make sure they know their investments, know their clients, maintain appropriate knowledge and proficiencies, resolve complaints in a timely fashion, carry reasonable insurance, and most importantly, treat their clients “fairly, honestly, and in good faith”.

Additional information on EMDs and their regulatory obligations can be found at your local Securities Regulatory Authority, the National Exempt Market Association, or the Private Capital Market Association of Canada. If you have any questions or concerns please contact wecare@phlfinancial.com.

What is the relationship between PHL Capital Corp, PHL Financial Group & Morteq Lending Corp.?

PHL Capital Corp. serves as the manager and administrator of MortEq’s lending business. As such, PHL Capital is responsible for all fund administration, accounting, mortgage origination and mortgage management of MortEq. PHL Capital is licensed under the Mortgage Brokers Act (British Columbia) and its principals have significant experience in residential and commercial real estate, investment analysis and property management.

PHL Financial Group Ltd. is registered as an Exempt Market Dealer (“EMD”) in British Columbia for the purpose of offering Class A shares of MortEq Lending Corp. (“MortEq”, or “the Issuer”), being a prospectus-exempt security, to persons (individuals, corporations and other legal entities) that are relying an exemption available to them from the prospectus requirement under NI 45-106.

MortEq Lending Corp. has been qualified as a Mortgage Investment Corporation (“MIC”) since May 2007 and has been solely engaged in raising capital for investment in mortgages.