Updated April 14, 2023
A commercial lease application is completed by a potential tenant and reviewed by a landlord to verify a business’s income and liabilities. The landlord is recommended to charge an application fee for conducting the credit check which can range between $50 to $200. The applying tenant may be asked to produce past tax returns and bank statements to prove the business’s revenue and profit.
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How to Screen a Commercial Tenant
After the landlord has received the completed application by the tenant it is now time to conduct a credit and background check on the applicant. The landlord will need to use third (3rd) party resources for any credit check on the business or individual as well as calling banks or credit card companies in order to verify the balance of tenant’s bank accounts.
Step 1 – Obtain the Rental Application
The landlord must first receive the application from the tenant with most or all the details entered. From here the landlord will be able to view the information and make an instant decision of whether or not the business is deemed worthy of the space.
If so, the landlord will need to begin verifying the information that was entered by the tenant.
Step 2 – Verify the Business with the State
All 50 States have a Secretary of State’s office or equivalent where an entity may be looked up to ensure it is currently in good standing with the respective State. If the entity is not in good standing then they may not be able to conduct financial transactions.
Step 3 – Obtain the Business’s PAYDEX Score
Once the business has been verified it will now need to have a credit check conducted. This can be completed by using one of the following third (3rd) party services:
- Experian – $49.95 for a one (1) time report (See Sample)
- Nav.com – $24.95 / month (cancel anytime)
- Dun & Bradstreet – $61.99 per report
After you have conducted your search you will receive a PAYDEX score from 1 to 100 based on the business’s credit worthiness. The higher the score the better.
Below is an explanation of the PAYDEX score:
Step 4 – Obtain Personal Credit Check
In addition to viewing the financials of the company the owners should also have their credit checked. A standard personal credit check is more commonly known as a score between 300 to 850 (highest being the best). You can obtain a detailed credit score through one (1) of the following sources:
- RentPrep.com – $28
- ScreeningWorks.com – $30
- MyRental.com – $30
- E-Renter.com – $32
A credit score of a commercial tenant is expected to be at a minimum of 700 for it to be considered credible. This is an above-average rating although due to the legal and financial liability that comes with commercial property an added creditworthiness should be required when leasing to businesses.
Step 5 – Contact References
Depending on what was entered by the applicant, the landlord will need to verify their tenant’s rental history, bank account balances, and any credit references. All of these references may be conducted over the phone. The applicant’s bank may request to see the consent and signature on the rental application before informing the landlord of any bank balances.
Step 6 – Personal Guarantee
If the landlord is debating whether or not to accept the applicant a personal guarantee should be added to the lease. This would ensure to the landlord that even if the business fails in the space that is being rented the person that “guarantees the lease” will continue paying rent until the expiration of the lease.
Step 7 – Making the Decision
If the tenant is accepted, a commercial lease should be drafted, agreed to, and signed by the parties. If the tenant was declined, the landlord should authorize a tenant rejection letter and describe the reasons why they were denied.
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How to Write
1 – Download The Form Provided
The Commercial Lease form is easily obtainable by selecting the appropriate format Adobe PDF, Microsoft Word (.docx), or Open Document Text (.odt). You may also view a preview using the image on this page then, selecting the appropriately labeled button. It is strongly recommended to download this form however, with a compatible program or browser, you may also begin working immediately.
2 – Provide The Lessor And Property Information
Section I, “The Landlord,” may already be filled out for you in some cases. If so, review the information for accuracy. Otherwise, use the first line to enter the Name of the Landlord/Lessor and the Current Date. Each of these items will have an appropriately labeled blank space to receive this information.
Next, we will need to define the Property being discussed. Utilize the blank line labeled “Property Address” to enter the Building Number, Street, any appropriate Unit Number, City, State, and Zip Code of the concerned Property. This should be the Physical Location of the Property. Below this report the number of Square Feet in the Property, just after the parentheses “(SF)” and any applicable Property Name on the blank space labeled “Property Name (if any).”
3 – Report The Business That Intends To Lease The Property
Section II, “The Business,” will refer to the entity that will be operating on the Property. First, some basic facts must be introduced. Use the blank space labeled “Business Name” to record the Full Name of the Business Entity, including any legal applicable suffixes (i.e. Corp., Inc., Ltd, Corporation, Incorporated, etc.). 
Next, on the second line in this section, provide the Principal Office Address of the concerned Business Entity. This should be the Business Entity’s legal address as it appears on the books. Use the spaces on the next line to enter the Phone Number and E-Mail Address where the Principal Office can be reliably reached.
Locate the words “Type of Entity.” Here, you must indicate the type of entity the concerned Business operates as. Four check boxes will be provided “Type of Entity,” “L.L.C.,” “Corporation,” “Partnership,” and “Other.” It is imperative that any entity who requires a suffix in its name mark the appropriate box. If first three check boxes do not correctly define the Business Entity, then select “Other” and fill in this information.
Now we must supply some necessary information that helps identify this Business. First, enter the state where the Business formed and operates on the blank space after the words “State of Incorporation.” Then, record the Business Entity’s “Federal Tax ID Number (FEIN).” Finally, define the “Business Type” on the last blank space in this section.
4 – Record The Tenants Responsible For This Business
Regardless of the type of entity leasing this Property, the individuals who make decisions for this entity must also be documented. This will be achieved in Section III, “The Tenant.” There will be enough room for the information of two individuals to be listed however, you may attach a sheet of paper if others must be included. For instance, the entity may be a Limited Liability Company or Corporation with several people responsible for the entity’s behavior. To begin, you will need to record the Name of the Owner/Principal of the Business on the first line. Directly below this name, make sure to record the “Ownership Percentage” this individual has in the Business Entity. 
The next requirement will be to indicate the relation this individual has to the Business Entity. Locate the word “Title.” You may mark the check box labeled “President,” “CEO,” “Vice President,” or “Other.” If choosing “Other,” enter this individual’s relation to the Business (i.e. Senior Partner) on the blank space provided.
The next area in this section must definitively identify this individual. We will start with the Owner/Principal’s Driver’s License Number. This should be reported on the first blank space of the next line. Then, on the adjacent blank space, enter the State that issued this Driver’s License. The next line will also have two spaces where the Driver’s License “Issued Date” and “Expiration Date” must be entered.
Finally, enter the Owner/Principal’s Social Security Number on the blank space labeled “Social Security Number (SSN).”
There will be a separate area for a second Owner/Principal’s information to be recorded. If more than two individuals are responsible for this Business Entity’s behavior, then make sure each additional individual’s information be submitted attached to this document.
5 – Name The Individuals Who Guarantee The Business Entity’s Lease For This Property
Section IV will only require the Full Name of each individual` directly responsible for this Business Entity in relation to the leased Property and the Commercial Lease Agreement associated with the leased Property. Two blank lines have been provided since at least two individuals are usually required. If there are more Guarantors, you may continue the Roster on separate document. Such an attachment must be present at this document’s execution.
6 – Submit A Detailed Report Of The Business Entity’s Rental History
In most cases, the Landlord/Lessor requires a Rental History of a prospective Tenant. This is also true when a Business Entity applies to lease a Property. Locate Section V, “Rental History,” then enter the Current Address of the Prospective Tenant on the space labeled “Present Address.”
The second line in this section will require the Rent the Business Entity currently pays to be defined. Enter the Full Amount the Business Entity pays then, check the appropriate box to indicate how often this amount is paid. You may only check one box (Month, Rent-Own, or Other).
If the Business Entity has a current Landlord, then enter his or her Name on the blank space following the word “Landlord” and his or her Phone Number on the next blank space.
Finally, record the previous Address of this Business Entity.
The next two areas will ask for the similar information for the Previous Address listed. Make sure that you record the Address, define the Rent and the Landlord for the Previous Addresses the Business Entity has leased.
7 – The Credit References Of The Business Entity Should Be Documented
There will be enough room for the applying Business Entity to document three Credit Reference in this matter. Each area will require the Full Name of the Credit Reference on the first blank line, the Address of the Credit Reference on the second blank line, and the Contact Information (Phone and E-Mail Address) of the Credit Reference entered on the spaces in the third blank line.
8 – The Monetary Status Of The Applying Entity Should Be Provided
In Section VII, “Current Monthly Revenue,” we will need to record the Gross Revenue of the applying Business Entity as well as the Total Monthly Expenses on the blank spaces provided. A blank space for each item has been supplied to report this information in an organized fashion.
9 – Define Business Entity’s Current Assets And Liabilities
In section VIII, “Current Assets,” we will continue to define the applying Business Entity’s financial status. Several lines have been provided for this task. Utilize the blank spaces provided to record the full worth of the Business Entity’s “Cash On Hand & In Banks,” “Savings Account,” “IRA/Retirement Accounts,” ” Accounts Receivable,” “Insurance Cash Surrender,” “Stocks & Bonds,” “Real Estate,” and “Vehicle” as a numerical dollar amount.
The following area delivers a structured matter to report additional assets not discussed. Most Business Entity’s will have additional Properties/Funds available to them. You may utilize the blank space labeled “Other Personal Property” to record the dollar value of additional Personal Property of the Business Entity.
Three additional lines, each with two blank spaces, have been provided to record more items not previously reported. Enter the Asset being discussed after the word “Other” then fill in its Dollar Value on the next blank space.
Finally, on the blank space following the words “Total Assets,” enter the Sum of the Dollar Amounts that have been entered in this section.
In addition to the Business Entity’s Assets, we will need to give a detail on the Business Entity’s Liabilities (i.e. losses, debts, operating costs). This may be achieved nicely in Section IX, “Current Liabilities.” Here, you will need to record the Dollar Amount of the Business Entity’s “Accounts Payable,” “Notes Payable To Banks,” “Auto Payments,” “Other Installment Accounts,” “Loans On Life Insurance,” “Mortgages On Real Estate,” and “Unpaid Taxes” on the spaces provided. 
Below this list will be an area where you may define “Other Liabilities” that have not been represented above. Use the blank space labeled “Other Liabilities” to name one Liability and the adjacent blank space to enter the Dollar Amount owed for that liability. There will be enough room to record three “Other Liabilities”
The last blank space is should have the Sum of all the reported Liabilities above entered as a numerical Dollar Amount.
9 – Provide The Business Entity’s Banking References
A standard requirement to obtain a Commercial Lease is to provide some basic banking information and references. There will be enough room to provide two “Banking References” in Section X. To begin locate the line beginning with the words “1st Account Bank Name,” then use the two blank spaces to enter the Name of the Bank providing a reference as well as the Bank’s Telephone Number. Next, you will need to enter the Bank Reference’s official Address. 
On the blank space, labeled “Account Number,” report the Bank Account Number the Business Entity holds with the Banking Reference. Adjacent to this, mark the check box labeled “Checking” or “Savings” to indicate the Type of Account the Business Entity holds with the Banking Reference.
In the area beginning with the words “2nd Account Bank Name,” record the other Banking Reference’s Bank Name, Telephone Number, and Address then, define the Account Number held by the Business Entity.
10 – The Owner/Principal(s) Of The Applying Business Entity Must Execute This Document
Locate Section XI, “Consent.” Then, on the first blank line in the paragraph provided, enter the Full Name of each Signature Party. 
Enter the Full Name of the Landlord/Lessor on the second blank space in this paragraph.
Each Principal/Owner named above must Sign his or her Name on one of the blank spaces labeled “Tenant Signature.” Next to this the Signature Party must enter the Date he or she is signing this document. If there is not enough room for every Principal/Owner, then you may continue the Party Signatures on an attachment.
Related Forms
Commercial Lease Agreement – Use after the tenant has been accepted to write a legal contract between the landlord and tenant.
Download: Adobe PDF, MS Word, OpenDocument
Residential Rental Application – Use for an applicant looking for an application for a room, apartment, or home.
Download: Adobe PDF, MS Word, OpenDocument