Every lender has two due diligence checklists. There is the one in the brochure, tidy and universal, and there is the one their credit committee actually works from, which is built from scars and is very specific about offshore borrowers. After a few hundred mandates we can mostly recite the second list. Here it is, roughly in the order it gets asked.
The corporate chain, walked slowly
The first question is never about the business. It is about the box the business sits in. Who owns the borrower, through which entities, in which registries, with which filings up to date. A group chart with a missing director in the third holding company will stall a facility faster than a weak year of trading, because the chain is where lenders look for the things they are regulated to look for. Get a lawyer to walk the chain before the lender does. Refresh the registers, tidy the dormant entities, and write one honest page on the group structure instead of leaving it to be discovered.
The second item is money coming in and money going out. Where does the group's cash collect, and where do dividends actually land? Lenders have learned that the profitable route to an offshore hole in their security is the bank account nobody mentioned. Expect questions about every account, every mandate, and a covenant or two about where cash is allowed to rest.
The security package, tested against reality
Every offshore facility is defined by its security package, and committees now test it against enforcement rather than against elegance. Share pledges over entities in reliable registries score well. Guarantees that cross three borders score less well than two documents that each do one job. Property mortgages score brilliantly in jurisdictions where the land registry works, and the honest ones will tell you which those are.
We have taken to doing a dry run of the enforcement story before the lenders do. If the facility defaulted tomorrow, in what order would security be perfected, through which local counsel, in how many months? If nobody in the room can answer, the structure is not finished. Lenders notice this work. It shortens their list, and a shorter list prices better.
The people and the paper
Committees increasingly ask who is behind the transaction in the boring sense: which individuals make decisions, where they are resident, and whether the governance documents say what everyone assumes they say. Powers of attorney, board resolutions and the small print of authority consume more calendar time than any financial covenant. The mandates that close fast are the ones where all of it was collected in week one.
And the paper itself: expect the lender's lawyer to own the first draft. Negotiating position, not identity, is worth fighting for. We spend more time on condition precedent schedules than on commercial terms these days, which tells you where the risk has moved.
Two more items complete the list. Screening and sanctions: not a formality but a live workstream, because a shareholder resident in the wrong place, or a counterparty with a name too close to a sanctioned entity, will freeze a file for weeks, and lenders would rather delay than explain. And accounts: committees read the numbers in their own currency and their own calendar, so expect restatement questions, audit gap questions wherever a subsidiary sits below the threshold, and a frank exchange about related party balances. Both items are answerable in an afternoon when they are prepared in advance.
None of this is a substitute for a good business. It is the tax you pay for being offshore, and like most taxes it is cheaper if you plan for it. Bring the checklist forward, and the diligence becomes a formality instead of an excavation.