How To Prepare for Refinancing Your Commercial Property

The lender will carry out due diligence on the borrowing entity, which will include ID checks on the borrower.

If the borrower is a limited company, they will request ID from the directors and beneficial owners and request financial statements as evidence of the borrower's financial strength.

Be prepared to spend some time dealing with lengthy forms that lenders often ask borrowers to fill out.

You will need to ensure that all documents relating to the property are available and up to date.

This includes providing an up-to-date EPC, asbestos survey reports (for properties built before 2000), fire risk assessments, and gas and electrical certificates to your solicitor, who will then pass them on to the lender or the lender's solicitor.

The lender will also require the building insurance policy for the property, ensuring their interest is noted on the policy.

Consider consulting with your insurance broker early on to avoid delays.

Tenancy and Regulatory Documents

Copies of any tenancies must be provided to the lender, along with any ancillary documents relating to that tenancy, such as rent deposit deeds or licenses to alter.

The lender will also need to see any relevant planning permissions and building regulation certificates for the construction, property use, and later works completed.

Title Issues and Indemnity Insurance

If there are any title issues with the property, such as restrictive covenants mentioned in missing documents, the lender will likely require indemnity insurance to be put in place.

Your solicitor can obtain a quote for this if one is not already in place.

If the borrower is a limited company, lenders often require personal guarantees from the company's directors.

In such cases, the directors must obtain independent legal advice on the guarantees, typically required in person.

Therefore, the borrower and/or directors must be available to sign documents and receive face-to-face advice during the refinancing process.