Commercial Lease Application Form (Free Templates)

A commercial lease application is a document meant to be filled by a potential tenant in order to enable the landlord evaluate the tenant’s creditworthiness. The application contains important information such as the details of the potential tenant’s business and income. The landlord is allowed to charge a fee between $50 and $200 for conducting the check. The potential tenant, through the application should provide the landlord with a full background of their business. The information should include bank balances, rental history, gross income and expenses, and if any of the owners of the business will be securing the lease with a personal guarantee.

A commercial lease application is a type of document required to be filled by a tenant that indicates interest in renting a piece of property for commercial use.

Commercial lease agreements vs. commercial lease application

Commercial lease agreements are the contracts between commercial tenants and their landlords. Commercial lease agreements are typically legally binding contracts, authorizing the tenant to rent a space for business purposes.

A Commercial lease application on the other hand is the first step to take in renting a space for commercial use. The commercial lease application is used to determine the eligibility and financial capability of the prospective tenant to rent the space in question.

Importance of Commercial Lease Application

The importance of the commercial lease application cannot be over-emphasized. The commercial lease application equips the landlord with the prospective tenant’s financial standing. It enables the landlord to view the prospective tenant’s income and business. The landlord can use the information provided to determine the creditworthiness of the prospective client’s business. The landlord can also conduct a credit check on the prospective tenant and their business.

The information about the prospective tenant’s financial standing can then be used to determine whether or not the prospective tenant can afford to pay the rent and also if the prospective client’s business can sustain the monthly, quarterly, and annual rent.

Reasons to Use an Application Process

Using the application process to determine the eligibility and financial capability of a prospective tenant offers the landlord security as well as a list of other advantages.

Minimize defaults

Using a commercial lease application allows the landlord to view the prospective tenant’s finances as well as cashflow, rental history, expenses and gross income. It is therefore easy for the landlord to spot a potential tenant that will not be able to support the regular rent payments with their business. By eliminating such prospective tenants, the land lord will significantly reduce the chances of renting to a defaulter.

Reduce late payments

Late payments are usually due to the inability of the tenant to pay the rent as at when due to unavailable funds. By using the application process, the landlord will evaluate the prospective tenant’s finances and determine whether or not the tenant would be able to pay the rent promptly.

Avert unnecessary legal squabbles

Legal squabbles may arise between the landlord and the tenant due to various reasons, but the most common reason for legal squabbles is payment. If the tenant is unable to pay the rent when due, the landlord may decide to take legal actions. This legal squabble can be avoided if only the landlord had used the application process to determine that the tenant was not going to be able to sustain the regular rent.

Guarantee some peace of mind

Without having to worry about whether or not the tenant is able to pay their rent, the landlord can rest assured that the rent would be paid when due.

How to Perform a Business Background Check

The landlord should require the prospective tenant to fill out the commercial lease application. Upon receipt of the application, the landlord should conduct a credit background check on the applicant. Credit background checks usually require the landlord to use third party resources. The landlord may also need to call the bank(s) or credit card companies used by the prospective tenant so as to verify the tenants account balance.

Here’s a simplified breakdown of the entire screening process:

Step I: Receive the rental application

The landlord should demand a completed rental application from the prospective tenant. The application will provide the landlord with a brief evaluation of the business. The landlord can instantly determine if the business can support the regular rent payments.

Step II: Confirm the business with the state

There is a secretary of state’s office or an equivalent in all 50 states. The landlord may look up the information provided by the prospective tenant at these offices. Also, the landlord can confirm the prospective tenant’s standing with the state. Only businesses that are in good standing with the state are allowed to conduct financial transactions.

Step III: Search for the business’ PAYDEX Score

Upon verification of the business, a credit check is conducted. The landlord has the option of choosing one of the three third party services below:

  • Dun & Bradstreet – $61.99 per report
  • Nav.com – $24.95 / month (cancel anytime)
  • Experian – $49.95 for a one (1) time

After the search has been conducted, the landlord will receive a PAYDEX score on a scale of 1-100 depending on how credit worthy the business is. A higher score indicates a more viable and credit worthy business.

Below is a simplified interpretation of the PAYDEX score range:

0-49 – High risk of late payment. (30 to 120 days beyond terms on average)

50-79 – Medium risk of late payment (30 days or less beyond terms o average)

80-100 – Low risk of late payment (Prompt payment to 30 days within terms)

Step IV: Demand the personal credit check

Once the landlord has viewed the financials of the company, the landlord should also go a step further by viewing the personal credit of the prospective tenant. A standard personal credit check is commonly scored between 300 to 850, with 850 being the best possible score. The landlord can obtain a detailed credit score through one of the following sources:

  • E-Renter.com – $32
  • ScreeningWorks.com – $30
  • RentPrep.com – $28
  • MyRental.com – $30

For a commercial tenant, the credit score should be at least 700 for the individual to be considered credible. Although the score is above average, it is necessary due to the high legal and financial liability of running a commercial property.

Step V: Contact the relevant referees

Based on the information provided by the prospective tenant, the landlord may be required to verify the tenant’s rental history as well as bank account balances and credit references. This verification can be done via phone calls, although the bank may request to view and verify the consent and signature on the rental application before divulging sensitive information.

Step VI: Ask for a personal guarantee

A personal guarantee between the landlord and the prospective tenant will help the landlord make a decision on whether or not to accept the prospective tenant’s application. The personal guarantee that the tenant will continue to run the lease until the expiration of the lease.

Step VII: Make up your mind

Once the prospective tenant meets up with the requirements and all information has been verified, the landlord may proceed to accept the tenant. Then, a commercial lease agreement will be drafted and duly signed by both parties. In the event that the tenant is rejected, the landlord should authorize a tenant rejection letter detailing reasons for the rejection.

Commercial Lease Application Form Template

I. THE LANDLORD

Landlord/Lessor: ______________________ Date: ______________________

Property Address: ____________________________________________

Square Feet (SF): ___________ Property name (If any): ______________________

II. THE BUSINESS#

Business Name: ______________________________________________

Principal Office Address: _______________________________________

Phone number: _______ Email Address: ______________

Type of Entity: ______ LLC ______ Corporation______Partnership ______ Other ______

State of Incorporation: ______________________

Federal Tax ID Number (FEIN): _____________

Business Type: _________________ (e.g., “pharmacy, convenience store” etc.)

III. THE TENANT.

Owner/Principal: _____________________________________

Ownership percentage: % Title: ______ President ______ CEO ______ Vice President ______ Other ______

Driver’s license Number: _________________ State: _________________

Issued Date: _________________ Expiration Date: _________________

Social Security Number (SSN): _________________

2nd Owner/Principal: _____________________________

Ownership percentage: % Title: ______ President ______ CEO ______ Vice President ______ Other ______

Driver’s license Number: __________________State: _________________

Issued Date: __________________Expiration Date: _________________

Social Security Number (SSN): _________________

IV. LEASE GUARANTEE

Name(s) of the person(s) that will guarantee the lease:

Person 1: ______________________________________

Person 2: _______________________________________

V. RENTAL HISTORY

Present address: _____________________________________________

Rent: $_____________ /Month _________ Rent _________Own _________ Other _________

If renting, Name of Landlord: _________ Phone: _________

Previous Address: ____________________________________________

Rent: $_____________ /Month _________ Rent _________ Own _________ Other _________

If rented, Name of Landlord: ______ Phone: __________

Previous Address: ____________________________________________

Rent: $_____________ /Month _________ Rent _________ Own _________ Other _________

If rented, Name of Landlord: ______ Phone: __________

Previous Address: ____________________________________________

Rent: $_____________ /Month _________ Rent _________ Own _________ Other _________

If rented, Name of Landlord: ______ Phone: __________

VI. CREDIT REFERENCE (Former landlord, Bank, Vendor, etc.)

1st reference: ______________________________________

Address: __________________________________________

Phone: ____________________ Email address:____________________

2nd reference: ______________________________________

Address: __________________________________________

Phone: ____________________ Email address:____________________

3rd reference: ______________________________________

Address: __________________________________________

Phone: ____________________ Email address:____________________

4th reference: ______________________________________

Address: __________________________________________

Phone: ____________________ Email address:____________________

VII. CURRENT MONTHLY REVENUE

Gross Revenue: $____________ Total Expenses: ________________

VIII. CURRENT ASSETS

Cash on Hand & in Banks $____________________

Savings Account $____________________________

IRA/Retirement Accounts $_____________________

Account Receivable $__________________________

Insurance Cash Surrender $_____________________

Stocks & Bonds $_____________________________

Real Estate$_________________________________

Vehicles $___________________________________

Other Personal Property $______________________

Other $

Other $

Other $

Total Assets: $______________________________

IX. CURRENT LIABILITTIES.

Account payable $____________________________

Notes Payable to Banks $______________________

Auto Payments $_____________________________

Other Installment Accounts $ ____________________

Loans on Life Insurance $ ____________________

Mortgages on Real estate $____________________

Unpaid taxes $_______________________________

Other Liabilities ____________________ $____________________

Other Liabilities ____________________ $____________________

Other Liabilities ____________________ $____________________

Total Liabilities $ ____________________

X. Banking References.

1st Account Bank Name ____________________ Phone ____________________

Bank Address ______________________________________

Account Number ____________________ Type __________ Checking __________ Savings

2nd Account Bank Name Phone ____________________

Bank Address ______________________________________

Account Number ____________________ Type __________ Checking __________ Savings

XI. CONSENT

I/We _________, the undersigned applicant(s) authorize the landlord, _, or his/her/ their agent to order and review my/ our credit and criminal history and investigate the accuracy of the information contained in the application.

I/We further authorize all banks, employees, creditors, credit card companies, references, and any and all other persons to provide to Landlord any and all information concerning my/our credit.

Tenant signature: ____________________ Date: ____________________

Tenant signature: ____________________ Date: ____________________

How to Use a Commercial Lease Application

In order to properly craft and utilize a commercial lease application, there are a few procedural steps that require to be taken.

Some of them include:

Download the template provided

You can easily obtain a commercial lease application form here. All you need to do is select the desired format (.pdf, .docx, or .odt). A preview will be provided via an image on this page. You can then select the appropriate button to choose your desired file format. Once the download is complete, you may begin to fill it out immediately.

Provide lessor and property information

You will need to fill out “The Landlord” section before giving the application to the prospective client. You can also define the property in question. You will need to provide the full address of the property, including the building number, street number, unit number, city, state and zip code. The address should be the physical location of the property. You also need to report the number of square feet in the space provided. Finally, add the applicable property name, if any to the space provided. The prospective client can verify the information provided for accuracy.

Document the business that intends to lease the property

The second section of the commercial lease application is meant for the prospective tenant. “The business” means the entity that the prospective client intends to operate on the property. The prospective tenant will need to provide all relevant information about the business in the appropriate spaces provided in the commercial lease application.

The prospective tenant would also need to provide the Principal Office Address of the business entity. This address should be the same address used for all legal documentations. Also, the phone number and email of the prospective client should be included.

Document the prospective tenants responsibility for the business

The individuals that will be making executive decisions for the business should identify themselves and provide all relevant information. There will be enough space for up to two individuals to provide all relevant information. Each individual has to specify their relationship to the business by indicating the appropriate title (CEO, President, Vice President, or other). If the choice is other, the individual’s relation to the business must be specified in the space provided.

Provide a detailed report of the business’s rental history

Most landlords or lessors require a rental history of the prospective client. With a commercial lease, the emphasis on rental history is so much greater.

Document the Credit references of the Business entity

The space provided will have a field meant to be filled in by the full name of the credit reference, the address, contact information (e-mail and phone) of the credit reference.

Examine the monetary status of the applying business entity

In the space provided, the tenant needs to fill out the gross revenue of the applying business entity. In addition, the total monthly expenses should be provided.

Document business entity’s current assets and liabilities

The tenant should be required to write out the state of the country’s current assets and liabilities. The spaces specify various typical assets and liabilities for any business. The tenant should record the dollar worth of all the assets and liabilities.

Obtaining the business banking services

The prospective tenant should be required by you to provide basic banking information and references in the spaces provided. The application will contain enough room for two banking references. The prospective tenant should also provide reference’s official address.

Execution of the document

The “Consent” section of the Commercial lease application is to be filed by the owner/principal(s) of the business entity. They should provide their full name(s) and signature.

Download Forms

Click here to download our comprehensive commercial lease application template for your property now and enjoy all the benefits of using our commercial lease application templates without any hassles.

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Using a Commercial lease application in the screening process provides the landlord with a comprehensive method to guarantee that the property is leased only to qualified businesses and guarantee prompt payment in subsequent periods. This is why the landlord needs to use a commercial lease template that covers all relevant information so as to carry out a thorough screening process before leasing their property.