Not as a like-for-like swap. BDC’s own Act limits it to a complementary role alongside a commercial lender, not a substitute for one.
Short answer
The Business Development Bank of Canada Act does not leave this to policy or credit appetite — it is written into BDC’s statutory purpose. Section 4(1) states “the purpose of the Bank is to support Canadian entrepreneurship by providing financial and management services”, and section 14(8), under the marginal note Complementary to other services, adds the limit that actually governs this question: “the services referred to in subsection (1) are to fill out or complete services available from commercial financial institutions.”
Section 14(8) binds the institution, not any one deal — a borrower cannot enforce it and a loan made in the teeth of it is not void. What it settles is what BDC is constituted to do: complete a stack, not replace the lender inside it. Section 14(2)(c) says how — BDC’s services may be “provided by the Bank as a member of a financing syndicate” — and section 14(3)(b) requires the Board to expect “a continuing commitment” to the enterprise from “persons other than the Bank”, which a stack where BDC is the only third-party lender does not satisfy. So the productive question after a bank commitment is withdrawn is not whether BDC will write the whole facility — it will not — but how small a senior position a different lender will take, with BDC sized in behind it.
the bank that is not allowed to replace your bank is exactly this fact pattern: a bank pulled its commitment nine days before closing, BDC declined to take the whole $2,000,000 senior position, and the deal closed once a credit union took a smaller first charge with BDC behind it.
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