The Essential Commercial Property Inspection Checklist for Bank Investments

When performing a commercial inspection, there are many factors to consider. Site visits are crucial to ensuring your loan was a sound investment, so it's important to be thorough.

Moreover, consider whether the customer was a good investment—and if you could see your bank working with them again in the future.

Commercial inspections are essential to the bank's investment in the property, and it's important that nothing is overlooked. Checking the same items each time provides a clear view of an investment’s overall health, regardless of the frequency of your site visits.

Reviewing the same checklist on each visit can help identify potential issues that could jeopardize the loan—and your bank. Whether you're new to the business or have been conducting site visits for years, a comprehensive checklist ensures nothing is overlooked.

Take your time documenting the following during your next site visit, and always include digital pictures with timestamps in case there are changes by the next visit.

Key Areas to Inspect

Structure

• Start with the basics: Is the building up to code? Does it present any liabilities?

• Check the roof and foundation for structural soundness.

• Note any cracks in the walls and signs of wear and tear on the roof.

Signage & Compliance

• Ensure the property complies with building safety codes.

• Verify that evacuation plans and emergency equipment are easily accessible, in good repair, and well-marked.

Exterior Elements

• Document the property's landscaping, elevation, curb appeal, parking, and signage.

• Check water drainage to prevent foundation damage.

• Assess the condition of the landscaping and the readability of posted signs.

• Ensure there is adequate parking for customers and employees.

Windows

• Inspect windows for proper sealing to prevent water damage, air leaks, and potential break-ins.

• Confirm that windows with locks are functional and easy to operate.

• Check for cracked glass.

Plumbing

• Inspect all plumbing elements for leaks and damage, especially where pipes enter and exit walls.

• Ensure all pipes are properly insulated and that insulation is dry.

Electrical & HVAC Systems

• Verify that electrical systems are up to code and any new electrical work was performed by a licensed electrician.

• Check that all circuit boxes are functioning correctly.

Collateral

• Ensure that any collateral used for the loan, such as business inventory or property, remains in the owner's possession.

Retail Traffic

• If inspecting a retail property, visit while the business is open.

• Document customer traffic and sales activity.

• If the business isn't operational yet, note traffic to nearby establishments.

Neighborhood

• Observe any changes in the neighborhood.

• Note whether businesses have moved out, new homes are being built, or if the area is in decline or improving.

Competitors

• Identify any nearby competitors to the business you financed.

• Measure their proximity and monitor for new competitors on subsequent inspections.

Why Use a Software Tool for Property Condition Reports?

A commercial property inspection is vital to the overall health of your bank’s loan portfolio. However, keeping track of all the details doesn't have to be difficult. An app like Layer can help streamline the property management process.

Ditch the clipboard and instantly capture field data, write notes, attach time-stamped photos, and upload files like lease agreements and floor plans for reference on-site.

Layer is an easy-to-use and affordable app with pre-built templates to make your inspections fast and efficient. With an intuitive interface and responsive support and service, Layer is the perfect solution for your commercial inspections.

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