How does a lender enforce a security interest if an Ontario corporation defaults on its loan?

Once a corporation defaults, a secured lender under Ontario's Personal Property Security Act generally has several enforcement options, and they aren't mutually exclusive. The lender can take possession of the collateral, sell or otherwise dispose of it and apply the proceeds to the debt, or seek the appointment of a receiver to take over and realize the corporation's business and assets in a more comprehensive way than simply seizing individual items.

These remedies are subject to procedural protections built into the PPSA and general law, including requirements to give the debtor and certain other interested parties notice before a final disposition of collateral in most cases, and rules around conducting any sale in a commercially reasonable manner. A lender generally can't simply seize and dispose of collateral however it likes without regard to these protections. Depending on the type of collateral, the corporation's cooperation, and whether enforcement is likely to be contested, a lender may proceed with a straightforward self-help seizure or may need to involve the courts, particularly to appoint a receiver or resolve a dispute. Given how fact-specific enforcement can get, both lenders and borrowers facing a default should get legal advice promptly.