I’d take a slightly different tack, albeit ultimately advising against it.
You’d need tax and legal advice, which your friend should pay for as part of the loan. There are company law issues with loans from companies. The tax issues can be dealt with. I don’t subscribe to the “Revenue won’t like the look of it” argument. With something like this, it’s black and white; you can either do it, or you can’t, and in this case it’s possible.
Then there’s the fact that your friend will be limited in terms of who they can borrow from because it would be a remortgage; that makes the deal harder to exit.
Personally, I’d secure the loan against the property to protect myself. I wouldn’t charge interest, but I’d want my friend to cover any out of pocket expenses such as professional advice (these would be rolled up and added to the loan).
And for me, it would depend on who the friend is; I have a couple of friends who I would do it for, but the sensible advice is to run a mile.
I’ve actually seen this done by people and seen it blow-up. The borrower runs into trouble and then starts to act the maggot. And he or she rationalises it on the basis that the lender “has loads of money”.
So my advice is to run a mile, but if it’s someone you trust implicitly and you really want to do it, get a solid suite of professional advice and have an exit strategy, but be prepared for the whole thing to drag-on if the borrower can’t refinance.