What this form is for
Banks require this Personal Financial Statement when you apply for a business loan, commercial credit line, or loan guarantee to assess your individual creditworthiness and ability to repay if your business cannot. It captures a snapshot of everything you own and owe on a specific date.
Before you start
- Recent statements for all bank accounts, brokerage accounts, retirement accounts, and investment portfolios showing current balances
- Current mortgage statements, auto loan balances, credit card balances, and any other outstanding debt amounts
- Recent property tax assessments or appraisals for real estate you own, plus vehicle titles or valuation guides for cars and boats
- Documentation of other assets like business ownership interests, notes receivable, life insurance cash surrender values, and personal property of significant value
- Social Security number, current residential address, and employer information
Step-by-step
1. Fill in your identifying information at the top: full legal name, home address, phone number, Social Security number, and date for which this statement is accurate (typically the date you complete it or end of most recent month).
2. List all cash and liquid assets: checking account balances, savings accounts, money market funds, certificates of deposit, and cash value of life insurance policies. Enter each account separately with the institution name and current balance.
3. Itemize securities and investments: stocks, bonds, mutual funds, retirement accounts like IRAs and 401(k)s. Use current market value, not what you originally paid. California community property rules may apply if you're married, so note whether assets are separate or community property.
4. Record real estate owned: list each property's address, current market value, outstanding mortgage balance, and monthly payment. Include your primary residence, rental properties, vacation homes, and land.
5. Detail personal property and other assets: automobiles with year/make/model and value, boats, collectibles, jewelry, business ownership interests, notes or accounts receivable you hold, and any other valuable assets.
6. Tally total assets by adding all categories together. Most forms have a designated line for this sum.
7. List all liabilities: credit card balances, auto loans, mortgages (matching your real estate section), personal loans, student loans, taxes owed, and any other debts. Include creditor name, balance, and monthly payment for each.
8. Sum total liabilities, then subtract from total assets to calculate your net worth. This is the key figure lenders evaluate.
9. Sign and date the statement. California lenders often require notarization for statements over certain dollar thresholds.
What lenders look for
- Banks scrutinize the ratio between liquid assets and total debt; they want to see you have accessible cash reserves beyond illiquid assets like home equity or retirement accounts that are hard to tap quickly
- Common mistakes include overstating real estate values without recent appraisals, forgetting to list contingent liabilities like co-signed loans or personal guarantees you've made, and omitting credit cards with zero balances that still represent available credit
- Update this statement every six months during your loan relationship because banks often require annual or semi-annual recertification, and material changes in net worth can trigger covenant violations