When you’re performing a commercial inspection there are a lot of things to consider.
And because these site visits are imperative to ensuring your loan was a good investment, it’s important to be thorough. Moreover, was this customer a good investment—and could you see your bank working with them again in the future?
Because commercial inspections are essential to the bank’s investment in the property, it is extremely important that nothing is overlooked. No matter the frequency of your site visits—whether quarterly or annually—checking the same things each time gives you a true read on the overall picture of an investment’s health.
Additionally, reviewing the same list of things every visit may help you keep from overlooking a red flag that would put the loan—and your bank—in jeopardy. So whether you’re new to the business or you’ve been in it a while and find your commercial site visits running on autopilot, we have something that can help keep anything from getting overlooked: A checklist.
Take your time in documenting the following during your next site visit. Always be sure to include digital pictures with timestamps, too, in case there are changes by the next visit.
Structure. Is the building up to code? Does it present a liability? Check the roof and foundation to make sure they are structurally sound. Note any cracks in the walls as well as wear and tear of the roof.
Exterior Elements. Check and document the property’s landscaping, elevation, curb appeal, parking and signage. Does water drain away from the structure to avoid damage to the foundation? Does the landscaping look like it has been neglected? Are all posted signs readable? Is there enough parking for the number of customers and/or employees?
Windows. Windows can be a source for water damage, cold or warm air escapes, and even break-ins. Check to make sure all windows are properly sealed. If the windows can open, do they have working locks? Are they easy or difficult to open and close? Is the glass cracked?
Plumbing. Inspect all plumbing elements for leaks and damage. Pay special care to areas where pipes enter and exit the wall. All pipes should also be properly insulated and insulation should be dry.
Electrical. Electrical elements, if not installed properly, can be a source for fires. Ensure circuit boxes are up to code and that any new electrical work was completed by a licensed electrician. Check amps to make sure that all are working properly.
Collateral. Check to see that whatever collateral the business owner used for the loan is still in their possession. Depending on the property, the business owner may have used anything from their home to business inventory for collateral.
Retail Traffic. If the property is a retail establishment, make your site visit while the business is open for the day. Document whether the business is busy and if sales are being made. If the property is not up and running yet, take note of traffic to nearby establishments.
Neighborhood. Document any changes to the neighborhood. Have businesses moved out? Are homes being built nearby? Is the neighborhood falling into disrepair or are nearby structures being maintained?
Competitors. Are there any nearby competitors to the business you loaned to? If so, are they too close? Document how many miles they are from the property. On additional inspections, check to see if any new competitors have opened up nearby.
The list is long, but a commercial property inspection is important to the overall health of your bank’s loan department. That being said, keeping track of it all doesn’t have to be hard because an app like Layer can help you to simplify the 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 onsite.
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. Learn more here >