A single figure explains much about the current mood among Vancouver’s growth-stage founders and commercial developers: 15. That is the approximate percentage by which Canada’s Big Six banks reduced commercial real estate loan originations in the second half of 2025, according to data tracked by the Office of the Superintendent of Financial Institutions. A 15% reduction is significant for any developer or founder whose project no longer fits the increasingly narrow criteria of traditional bank lending.
Into that gap has stepped a faster, though more expensive, class of lender. Canadian private credit assets under management grew an estimated 22% year-over-year to approximately $85 billion nationally as of Q4 2025, according to Canadian Venture Capital and Private Equity Association figures. British Columbia’s share of that market is growing rapidly: exempt market filings for mortgage investment funds in BC rose roughly 18% in Q1 2026 compared to the same period last year, according to BC Securities Commission data on SEDAR+. For founders turned away by traditional lenders, identifying these active capital sources is essential.
Private credit is not new, but its scale and institutional legitimacy in Vancouver have shifted. This is a structural response to a regulatory environment that has made chartered bank lending more capital-intensive and selective.
The mechanics are clear. When OSFI updated its Guideline B-2 and Capital Adequacy Requirements for commercial real estate exposure, it aimed to reduce systemic risk. The result is a credit gap that private lenders now fill at spreads reflecting the risk premium banks are no longer willing to absorb. For borrowers, this often means rates 300 to 600 basis points above bank prime. For lenders, it provides yields that institutional and family-office capital find attractive in a landscape where fixed-income alternatives have become less compelling.
Several established managers are active in BC. Toronto-based Romspen Investment Corporation is a dominant player in commercial mortgage bridge and construction loans. Trez Capital, with significant Vancouver roots, operates across multiple private debt strategies. Fisgard Capital, a Victoria-based mortgage investment corporation, focuses on the small-to-mid commercial mortgage segment.
Newer entrants include smaller, family-office-backed vehicles raising $50 million to $200 million, specifically targeting BC small-to-medium enterprise credit. These funds offer products chartered banks often cannot, such as interest-only bridge periods, revenue-based repayment structures for software firms, and mezzanine financing. The Canadian Lenders Association's BC membership has expanded to include several new registrants focused on growth-stage credit.
Founders can navigate this market by reviewing offering memoranda on SEDAR+, which disclose fund sizes, target return profiles, and investment mandates. The CAIA Association's BC chapter also serves as a networking node for borrowers seeking alternative credit managers.
The cost of capital is higher. First-mortgage bridge rates in BC currently range from 8% to 12%, depending on loan-to-value and borrower profile. Revenue-based financing for software businesses often carries an effective annual cost of capital exceeding 15%. Borrowers typically accept these terms when traditional financing is unavailable or when speed is a priority.
As this market matures, the question is whether this expansion builds durable infrastructure or simply fronts a rate cycle. If the Bank of Canada continues its easing trajectory and bank credit conditions loosen, some deal flow may return to chartered institutions. The managers who survive that rotation will be those with proven underwriting expertise and deep borrower relationships.
What to watch:
- SEDAR+ exempt market filings for new BC mortgage investment fund raises in Q2 2026 to gauge institutional appetite.
- OSFI’s updates to commercial real estate underwriting guidance, which may influence the credit gap.
- Bank of Canada rate decisions through mid-2026; each 25-basis-point cut improves chartered bank deal economics and puts pressure on private credit spreads.
- The potential for BC’s exempt market structures to attract retail investor capital at scale, which would expand the lending pool but increase regulatory scrutiny.
