Business Financial Statement an Requirement for Commercial Lease

Your business financial statements should show that you can carry the payments on your commercial lease.
Your business financial statements should show that you can carry the payments on your commercial lease. (Image: FPG/Retrofile/Getty Images)

As you start or expand your business, your company needs to lease space or equipment. When submitting your application to the landlord or applying for financing on a commercial lease, you may require business financial statements. If your business is new, you may not have financial statements available. Or, your existing business may have hit a few challenges affecting your credit score. There are options to meet the requirements of a business financial statement to be approved for a commercial lease.

New Business Requirement

If your business is less than two years old and you need a commercial lease on equipment, your business financial statements may not be strong enough to support the financing. If this is the case, in addition to the credit application, you may require the last two years of personal tax returns and personal financial statements for all of the principals in the business to show that you are able to carry the payments on the lease. You may also require a business plan with cash flow projections.

Established Business Requirement

If you have been in business for two years or more, a lender or landlord will require your business financial statement. For a lender to give you the best options available to you on a commercial lease, she will review your credit history for slow payments and credit rating. If your credit rating is less than 675, the principals' personal financial statements may be required, as well.

Business Financial Statements Requirements

For your application for a commercial lease to be accepted for consideration, your potential landlord or lender may require business financial statements prepared and signed by an accountant. Or, your lender or landlord may accept business financial statements prepared in-house and supported by corporate tax returns. Before you submit your application, asking your lender what his requirement is will expedite your approval on your commercial lease.

Past, Present and Future Financial Statements Requirements

Depending on the amount of financing or lease payments, some lenders and potential landlords may require business financial statements to cover the past, present and future financial activity of your business before approving your commercial lease. A lender may require the last two years of business financial statements signed by an independent auditor. With the audited statements, a lender may also require the last two or three monthly in-house financial statements to be sure that your business is currently stable, as well as cash flow statements for the next year.

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