What happens if I find the seller pledged the same equipment as collateral to two different lenders?

This raises both a priority problem and a misrepresentation problem, and they need to be looked at separately. On priority, Ontario's personal property security regime generally resolves competing claims to the same collateral based on registration timing and related rules, meaning an earlier-registered lender's interest can outrank a later one regardless of what either lender was actually told about the other's security at the time.

On the misrepresentation side, if the seller represented in the purchase agreement that the equipment was unencumbered, or disclosed only one security interest when there were actually two, that generally breaches the representation, supporting an indemnity claim subject to the negotiated survival period, cap, and basket. This is exactly the kind of gap a lien search against the seller's assets before closing is meant to catch — if one wasn't done at all, or one was done but missed something, understanding what happened and why is part of assessing both the priority exposure and the claim against the seller now.