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The Triple “A” Funding System – Step Eight – Loan Documentation – Part One

As we continue our look at the unique Triple “A” Funding System, we’ve reached Step Eight in the process.

As I’ve mentioned in previous weeks, The Triple “A” Funding System is the system we use every time we work with a client. It is a specially devised 9-step system which speeds up the process of obtaining business finance for our clients.

Last week, we looked at Step Seven, which is the Lender Approval step. This week we’re looking at Step Eight – which is all about the Loan Documentation. There is quite a lot to get through, so I’m doing the Loan Documentation step over two weeks – this week and next week.

So, let’s get started.

Regardless of the type of loan you are arranging, there will be a requirement for loan documentation to be issued by the lender and then executed by you as the borrower.

When you are taking out an unsecured business loan the process is usually very quick. The lender will issue a formal offer letter and if the loan is in the name of a limited company then they will also issue a personal guarantee and a debenture both of which need to be signed by you as the borrower.

Many of the lenders providing unsecured business loans, still require this documentation in hard copy. In other words, the documentation needs to be printed off, signed and the original documentation with your signature returned to the lender.

However, increasingly, lenders are enabling this process to be carried out online. So, the loan documentation is uploaded to a portal and you are provided with access to the portal, so you can execute the documents online. The execution of the documents is done by e-signature and so no hard copies are required.

This obviously speeds up the process and enables the loan to be drawn down more quickly.

Regarding asset finance and invoice discounting, many lenders still issue ‘hard copy’ documentation, although again there is a general trend towards executing documents online.

In general, the loan documentation for asset finance, invoice discounting and unsecured business loans is relatively straightforward and can be executed without any delays.

The more complex documentation arises where the loan being made by the lender is secured against a property asset.

This can be any type of property utilised for business purposes, such as a guest house or hotel, nursing or care home, warehouse or industrial unit, offices, design studios and retail units.


All different property types, but all commercial properties from which a business can be operated.

In addition to property that is “owner-occupied”, a property asset also includes investment properties, HMO’s, student accommodation and buy to let properties.

Furthermore, a property development facility will also be secured on the freehold property asset being developed.

All these different types of property have one thing in common – they require a charge to be registered by the lender.

That means the involvement of a solicitor whose job it is to register the charge on behalf of the lender.

This process can work in several different ways. On occasions the lender will be happy with “dual representation”. In other words, they are happy to accept the solicitor acting for you as the borrower, to also act for them as the lender.

This is usually cheaper and often means a quicker process because the same solicitor is acting for both parties. Dual representation is most common when finance is being raised for a buy to let transaction.

However, in most cases, where the deal is more involved, the lender will insist on separate legal representation.

This means that as the borrower you use your own solicitors and the lender appoints their own solicitors to act on their behalf.

This is usually because the lender wants a solicitor to act for them who has experience in commercial property transactions and can provide the lender with the expertise they require.

And as the borrower you employ your own solicitor to act on your behalf. When it comes to employing your own solicitor, a word of warning. Having been involved in commercial property transactions for many years, time and again I’ve observed that the client’s solicitor can often be the cause of delays to the process.

For understandable reasons, the client wants to use their own solicitors. The issue is, their solicitor may be a “generalist”. In other words, they helped them buy their house 15 years ago and prepared their wills for them 10 years ago. Now suddenly the client gives their solicitor a complex commercial property transaction and they are simply not up to the task.

On many occasions over the years, I’ve seen delays occur because of the client’s solicitor.

Please bear this in mind. Your family solicitor may not be the best option when it comes to conveyancing for a commercial transaction.

My advice is, shop around! Look for a solicitor who has expertise in commercial property, speak to them, meet them if necessary and explain what it is you are doing, what finance you are arranging and what you’ll require from them.

They will be able to explain their experience and give you an estimation of their costs.

If need be, speak to more than one firm and then decide. If possible, try and get a personal recommendation. Alternatively, we have a panel of solicitors we regularly use for commercial property transactions, so get in touch with us and we’ll put you in the right direction.

Very often, a solicitor specialising in commercial property will be more expensive than your local or family solicitor but please don’t be put off by their quote.

The phrase “buy cheap, buy dear” has probably never been more appropriate and I can guarantee a specialist who on the face of it looks more expensive, will work out cheaper in the long run not least because of the time they will save you.

Part two of Loan Documentation next week!