If you are leasing commercial space landlords will want to see some sort of financials to ensure that you have the money to afford the rent.
What Financials Will Commercial Landlords Want to See?
- If you do business as an S-Corp, LLC or other entity then the landlord will typically want to see the last 2-3 years of profit/loss statements, balance sheets, etc.
- If you operate your existing business as a sole proprietor then they may ask to see the last 2-3 years of tax returns. They may also ask you to fill out a personal financial statement.
- If you are a startup then you will have to show 2-3 years of tax returns and/or a personal financial statement.
- In addition if you are relying on a small business loan to fund the business set up and operations then it would be a good idea to obtain a letter from your bank showing that you have been pre-approved for a certain dollar amount.
Landlords know that when starting up a business you don't typically make profit for at least 6-12 months. If you do then that is awesome! They know you are going to have initial upfront expenses such as build out costs, payroll, inventory, etc. On top of that you will be required to pay the first months rent and a security deposit equal to at least one months rent (depending on the strength of your financials) UP Front.
At the end of the day they want to see how much you have left AFTER paying all of those upfront costs to ensure that you have money to pay rent at least for the first 6-12 months until you start to be profitable.
If you have any questions about how to lease commercial space or what financials will be required don't hesitate to give us a call.