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Let's Get Personal: A Guide to Help You Fill Out Your SBA Personal Financial Statement

Need help with paperwork? Get your financial ducks in a row with this guide to help you fill out your SBA personal financial statement.

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Let's Get Personal: A Guide to Help You Fill Out Your SBA Personal Financial Statement

A Guide to Help You Fill Out Your SBA Personal Financial Statement

Need help with paperwork? Get your financial ducks in a row with this guide to help you fill out your SBA personal financial statement.

SBA Personal Financial Statement

It is a myth that the SBA offers loans for entrepreneurs to start or grow a business. To the contrary, when you apply for an SBA loan, your application goes through a bank or other approved lender.

The SBA then serves as a guarantor for loans approved through its programs.  As such, a guarantor promises to pay back part of the debt in the event of default.

To make sure you can afford to repay the debt, you must include an SBA personal financial statement. therefore, use the guide below to loan officers you are ready to accept a loan for your business.

Who Submits the SBA Personal Financial Statement for My Business?

Not everyone should submit a personal financial statement within a company. However, when filling out a personal financial statement for 8(a) and 7(a)/504 loans, the amount of equity you hold in the company determines whether you submit a personal financial statement.

7(a)/504 Loans

With 7(a)/504 loans, owners with more than 20% equity must provide an SBA personal financial statement.

Owners are also called proprietors, general partners, or managing members of an LLC.  Furthermore, spouses and children with more than 20% equity must submit personal financial statements. Moreover, this is true even if they are not involved with the day-to-day business operations.

If you file a joint tax return, your spouse should submit a personal financial statement. However, your spouse may not become a guarantor on the loan depending on the circumstances. You are disclosing to the SBA that you have joint assets and liabilities.

8(a)

The 8(a) loan is for individuals claiming economic disadvantage. Submit a financial statement if you own more than 10% equity in the business. However, in the event of legal separation from a spouse, split your assets and liabilities.

What Documents Do I Need?

Get organized before beginning your application by gathering the following financial documents:

  • Detailed bank statements for checking and savings accounts
  • Detailed retirement account statements (401k, IRA, etc)
  • Life insurance statements that show current cash value
  • Pay stub with year to date pay or annual salary
  • Supplemental income statements: disability, pensions, real estate, alimony, etc.
  • Liability statements: Mortgage, student or personal loans, auto loan, credit card statements.
  • Statements for the current value of stocks, bonds, and other investments

All statements must show an account number, payment amount, and current balance. For quarterly statements, use your last published statement to get the most current information.

The Assets Column

The assets section of the personal financial statement is for all forms of income. Below is an explanation of each section listed:

Cash on hand and in banks - provide the current balance in your checking accounts.

Savings account - Provide current cash balance in all savings accounts.

IRA or other retirement accounts - Enter the current value of your retirement accounts including Deferred Compensation.

Accounts and notes receivable - Enter the total value of all money owed to you, if any. If you’ve loaned any of your personal money to the business, include this amount in the total.

Life insurance - Enter the cash surrender value of any life insurance policies. This is not the total policy value.

Real estate - Enter the current fair market value of any real estate you own.

Automobile - Enter the current fair market value of all vehicles owned.

Other personal property – Add items that have cash value like collectibles and art.

Ownership interest in firm - Enter the current fair market value of your equity in the business. If you have ownership in other businesses, include the equity value here.

Other assets - If you own any other assets not listed on this form, enter the total current value of those assets here.

The Liabilities Column

Liabilities include expenses and debt. Use the information below to calculate totals for each section:

Accounts payable - Enter the total value of personal unpaid account e.g. utility bills, phone bills, childcare, etc.

Notes payable to bank and others - Enter repayment amounts for personal loans made to you from individuals, financial institutions or from your current business.

Loans on life insurance - Enter the total value of all loans currently due on Life Insurance Policies, if any.

Mortgages on real estate - Enter the total value due on all real estate related mortgage(s).

Unpaid taxes - Enter the total amount of all unpaid taxes.

Other liabilities - Enter the total value of liabilities not listed in the sections above but that are currently due.

Equity in primary residence - Enter the difference between the present market value of your primary residence and your current mortgage balance.

Total liabilities - Calculate the total of all listed liabilities.

Net Worth - Calculate your net worth by subtracting your "Total Liabilities" from your "Total Assets." Show negative net worth using parentheses.

SECTION 1. SOURCE OF INCOME

This section is a summary of all sources of income including current employment, salary from business and investment income.

SECTION 2. NOTES PAYABLE TO BANKS

Enter the name and address of individuals and financial institutions where you owe money. The totals entered should match the amount listed in the “Notes Payable to Banks and Others” in the Liabilities section.

SECTION 3. STOCKS AND BONDS

Enter the number of shares, the name of securities, and the date of fair market value for any public shares of stock and bonds you currently hold. This does not include membership interest in the business applying for the SBA loan.

SECTION 4. REAL ESTATE OWNED

Starting with your primary residence, detail all real estate owned using your most current mortgage statements as a reference. All values should match the total amount listed in the Real Estate section in the Assets column.

SECTION 5. - SECTION 8.

These sections offer the opportunity to explain special situations surrounding any debt or liabilities. When explaining your circumstances, always use exact amounts and dates of correspondence.

Summary

Accuracy is more important than speed when completing an SBA personal financial statement. The SBA needs to analyze your current financial situation because they become responsible for part of the loan.

Borrowing more than you can comfortably afford can lead to default. Check out our website for more information on managing an SBA loan default.

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