As we mentioned in our blog post last week, there are any number of reasons for transaction completions to be delayed beyond the scheduled date and many of these are understandable. For example, unexpected issues arise as a result of due diligence or negotiations stick on a contentious point. However, often completions can be delayed by a day or two because of easily avoidable administrative issues. We’ve been taking a look at some of the avoidable causes of last minute delays such as transfer deadlines, missing board members and errors when signing. This week we consider the breakdown in communications that can lead to essential financial information not being available for consideration at board meetings and pre-completion requirements of lenders that are often dealt with by borrowers themselves.
Financial information not available
Board minutes on a transaction are usually negotiated and drafted by solicitors in advance of completion, however board members should read through the agreed minutes before the completion date to ensure they know the details that have to be discussed at the board meeting(s). On certain transactions the board minutes will require accounts and other financial information to be tabled for consideration by the board. The FD should be aware of this and ensure such information is ready and available for completion.
Requirements of lenders
Banks have to deal with a host of regulatory and administrative requirements prior to funding however many of these are dealt with by individuals at the companies rather than lawyers so they sometimes slip through the net until just prior to completion. An entire transaction can be held up for the sake of a copy of a passport. The bank isn’t being awkward, they have no choice but to comply with these requirements.
Ensure that any bank requirements are known in advance and what the deadlines for them are. Have you provided all your “know your customer” documents (the copies of passport and proof of address etc) in sufficient time for the bank to process them and open necessary accounts? Are there any confirmations the bank will need? Will the bank allow money to be held by a solicitor in anticipation of completion, if that’s what is intended?
Do you have any top tips to add?