A commercial security transaction relates to the secured lending to a customer of a bank or other lending institution where the purpose of the loan is clearly for the customer's business purposes.
Many banks have policies whereby in commercial security transactions the banks instruct separate practice units to represent them. Borrowers instruct their own solicitors. The banks' solicitors will usually recover their fees and outlays from the borrowers.
The relationship between solicitor and borrower differs greatly to the solicitor and lender relationship. The borrower may be prepared to "live with" a minor defect in title or some lack of planning or building consent whereas a lender may take an entirely different stance. All usual enquiries in respect of a prudent purchaser will be considered by a solicitor acting for the bank in addition to further matters designed to ensure the bank’s security properly protects the bank’s legal and financial position.