Site inspections are sometimes required for business and personal transactions. Many times it will be a surprise and you are told there will be an on location review of your commercial property before closing.
How to Pass a Site Inspection
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Consider the top 5 ways to make sure you pass. Head off problems before they happen!
1. Ask what the inspector will be looking for.
2. Correct as many issues or problems before the visit.
3. Have relevant documentation ready. This includes deeds, titles and licenses.
4. Ask if you passed, what problems there are and if you can correct any during the visit. Also ask if you can agree to fix other problems by a target date.
5. If you failed the visit, get a list of the issues and a commitment to a follow up visit.
What is a Site Inspection?
There a several types and are all intended to look at your location and make sure you, your assets and your business exist. They are often in person, but can also be virtual. The focus is either on equipment, a company, a residential home or commercial property. For example, a loan against equipment such as construction equipment or vehicles will often require an in person visit.
1. Equipment Site Inspection.
The top 5 steps for an equipment location visit.
1. All equipment is on location.
2. The owner should be there during the visit.
3. It is operating properly.
4. Titles, model and serial numbers are available.
5. Operate the equipment. That can mean starting equipment or operating other types of machinery.
The top 5 steps for vehicles
1. Vehicles are on location.
2. Owner should be present.
3. Vehicle is operating properly.
4. Titles, registration, model and serial numbers are available.
5. Start vehicle during onsite visit.
2. Business site review.
Your company is completing a transaction with another party. As part of the transaction, an on location visit of your location is required.
In many cases, the lender or other party wants to verify basic things. For example, verifying that your company exists at the listed address, is open and operational.
The top 3 steps to prepare for a visit.
1. The owner should be present.
2. Provide a description of operations.
3. Have a copy of any current leases and licenses ready.
4. Show the business operating real time while there.
3. Commercial Real Estate
The top 3 steps for a commercial location inspection.
1. The owner of the property should be on the premises.
2. Have the original deed or copy of property available.
3. Any recent appraisal should be on hand.
4. Surprise Inspection
Occasionally, surprise visit may be ordered. This happens most often in the following situations.
1. Delinquency or accounts in default.
2. Problems with the collateral. This can include a lien being placed on your assets at the secretary of state.
3. Physical damage to your assets or company location can trigger an unexpected visit.
4. Disputes with a lender or landlord.
FAQ: How to pass a site inspection:
What is a Site Inspection?
When you are required to allow an onsite inspection of your assets or business as required to complete a transaction. They are usually completed in person but can be virtual.
How do I get ready for an inspection?
Have everything there and in working order if possible. This includes all paperwork related to the assets or the business.
How do I pass?
Be prepared. Answer all questions thoroughly and accurately. Provide explanations about anything that needs repair. Ask the inspector if there are any questions or issues before they leave. This allows you to address concerns they did not mention. Also ask if they feel you have passed and if not, why?
What if I failed?
Find out what all the issues are. Commit to which issues you can fix, when and agree if that will be satisfactory. Schedule a follow up visit after you have corrected the problems.
Site inspections come at the end of many loans and other transactions.
Regardless of when, plan ahead to make the results of your inspection as good as you can. Maybe make sure the premises is clean and tidy. Similarly, all equipment and vehicles should be there, clean and operational. Have all your paperwork ready and answer all questions.
Finally, find out if you passed before the inspector leaves! If not, asking what you can do to fix or correct can turn an unsatisfactory visit into a successful one.