What this form is for
Banks require a Personal Financial Statement when you apply for a business loan to evaluate your personal creditworthiness and ability to guarantee repayment. This snapshot of your individual or household finances shows lenders whether you have sufficient assets to back the loan if your business cannot.
Before you start
- Recent statements for all bank accounts, investment accounts, retirement accounts, and life insurance policies showing current cash and surrender values
- Current mortgage statements, auto loan balances, credit card balances, and any other outstanding loan documents
- Recent property tax assessments or appraisals for real estate you own, including your primary residence
- Titles or recent valuations for vehicles, boats, and other titled property
- Documentation of any business ownership interests with current estimated values
Step-by-step
1. Fill in your personal identifying information at the top including full legal name, home address, and Social Security number. If filing jointly with a spouse, include both names and both Social Security numbers.
2. Complete the Assets section by listing cash and equivalents first, including checking accounts, savings accounts, money market funds, and certificates of deposit with each institution named and current balance shown.
3. Enter marketable securities next, listing stocks, bonds, mutual funds, and brokerage accounts separately with current market values, not what you originally paid.
4. List all real estate you own with property addresses, current market values based on recent appraisals or tax assessments, and the amount owed on each property. Ohio residents should note that primary residence valuations often use county auditor assessed values.
5. Add other significant assets including vehicles with make, model, year and current value, retirement accounts showing vested balances only, cash value of life insurance, and business ownership interests.
6. Total all asset categories and enter the sum on the Total Assets line. Double-check your addition.
7. Move to the Liabilities section and list all debts starting with mortgages and home equity lines, showing creditor name, original loan amount, current balance, and monthly payment for each.
8. Add all other liabilities including auto loans, student loans, credit card balances, personal loans, and any contingent liabilities where you have cosigned or guaranteed another party's debt.
9. Total all liabilities and enter on the Total Liabilities line, then subtract this from Total Assets to calculate your Net Worth. This bottom-line number is what lenders scrutinize most.
10. Sign and date the form. Ohio lenders typically require both spouses to sign even if only one is the business borrower.
What lenders look for
- Underwriters compare your stated assets against credit reports and will ask for verification statements, so never inflate values or omit liabilities hoping they won't notice.
- A common mistake is listing retirement account balances without subtracting early withdrawal penalties and taxes, which overstates liquid net worth that could repay a defaulted loan.
- Banks look for net worth at least equal to the loan amount and prefer to see liquid assets covering six months of projected loan payments.