Alternative Lender (B-Lender)
A mortgage lender operating between traditional banks and private lenders — offering slightly relaxed underwriting and slightly higher rates than banks.
Alternative lenders (often called 'B-lenders') occupy the middle tier between traditional banks (A-lenders) and private lenders. B-lenders offer more flexible underwriting than banks — accepting bruised credit, non-standard income documentation, or higher debt ratios — but still use institutional underwriting standards that are more rigorous than private lending. Rates are typically 100–250 basis points higher than bank A-rates and lower than private rates. Major Canadian B-lenders include Home Capital, Equitable Bank (EQ Bank), First National (B-Side), Community Trust, and others. Terms are usually 1–3 years, with a goal of refinancing to an A-lender.
Related Terms
A non-bank, non-regulated mortgage lender — typically an individual, mortgage investment corporation (MIC), or syndicate — used for borrowers who can't qualify with traditional lenders.
A non-bank lender that specializes only in mortgages — broker-channel distribution, competitive rates, and typically better IRD penalty calculations than Big 5 banks.