Hi were leasing out a retail/ church space. I need to do a credit check for their business also what other procedures do you use for checking businesses out
Dun & Bradstreet
Hey thanks anyone have tips for what to look for for commercial leasing?
For churches, office, or retail?
This space will likely be rented to a church. They don't seem to have normal tax returns so I'm not used to this.
My experience is more in residential rentals.
the tenant pays for the credit check, and a report gets sent to you once they complete it. if they're not computer literate, this may be a problem.
Thank you these should work
I would highly recommend a detailed statement of cash flows for the past 2-3 years as well as balance sheets / bank account statements. They may pay their bills on time right now but will their cash flow support the rent you will be charging? If you have a bank loan on the property, someone in their underwriting department may be able to help you analyze their financials.
Churches live off collections. You would need to know if they were moving from right around the corner or not.
Right around the corner they usually maintain their members. If they move far away they tend to lose many in the congregation who are either old and can't travel long distance or the members do not want to spend the extra time, expense, traffic to go there from where they currently live.
So if this church is in effect starting over they are a higher risk. Churches live off donations. How many days a week they are doing service and how many times a day service runs will determine revenue along with if they have technology to sell tapes, videos, books etc.
If this church tenant makes up the only building then parking is not a big of an issue but if you have other tenants it can be a major problem.
Lenders and a lot of landlords do not like churches because of traffic issues with other tenants and also if they stop paying the churches can get political and cause a public uproar. Lenders and landlords do not like that bad public publicity. The churches tend to not pay market per sq ft rates and want a deal.
For all these reasons if possible you might want to consider renting to other tenants first and the church as a last resort.
And if a church doesn't pay and you want to evict, they may stage a bogus rally publicizing the event.