We know that we are dealing with the bank, and that they typically follow a pretty strict price decrease structure.

Yes I agree, the owner's are very strict on who they let rent from them, I do know they allow no smoking and no pets, ect, but as I was explaining to my attorney, if there's a problem later with the tenant, how can I enforce the lease if I don't have a written copy?

IL is a "strict compliance" state so I recommend getting an attorney with experience in this field sooner rather than later. 

Or is it treated strictly as a business and have to prove its income history etc? 

This is supposed to be better regulated, but you just never know these days.  

Attorneys have become surpassed by government regulators.

If you are unclear about whether the regulations for any of them apply to hard money/private money lending, then there is contact info for every state via email and phone to a person that will tell you.http://mortgage.nationwidelicensingsystem.org/SLR/Pages/default.aspx 

Go by your lease and local regulation.  

I was going to be my own boss and do what I loved to do.As the years have passed since 2007, I watched regulation take over commercial lending.

@Jennifer H.A middle of the road tactic we frequently employ with our student tenants, if they drop the ball at the beginning of our relationship, is to strictly enforce the late fee - even on the first offence - but, once the late fee is paid, we tell the tenant if there are no further issues throughout the remainder of the lease we will either apply the late fee to their rent at renewal or refund it along with their security deposit.This keeps the relationship with those who honestly made a mistake and, for those who make such conduct a habit, it is - to borrow from @Jeff Rabinowitz - a drop in the liquid fund ;-)