What this form is for
Banks require this form when you apply for a business loan, line of credit, or personal guarantee. It shows your complete financial picture outside the business so lenders can assess your ability to repay if business cash flow falls short.
Before you start
- Recent statements for all bank accounts, retirement accounts, brokerage accounts, and cash value life insurance policies
- Current mortgage statements and loan balances for all real estate you own
- Latest credit card statements and balances for all personal cards and installment loans
- Recent property tax assessments or appraisals to estimate fair market value of real estate and vehicles
- Documentation of any other debts including personal loans, student loans, or contingent liabilities where you cosigned
Step-by-step
1. Complete the header section with your full legal name, current address, Social Security number, and date of the statement. If you file jointly with a spouse, indicate whether you are presenting individual or combined finances.
2. List all cash and liquid assets with current balances: checking accounts, savings accounts, money market funds, and certificates of deposit. Include the institution name and account numbers for verification.
3. Itemize marketable securities at current market value including stocks, bonds, mutual funds, and brokerage accounts. Note the institution holding each asset.
4. Detail all real estate you own with the property address, current fair market value, and outstanding mortgage balance for each. Pennsylvania lenders will check county records to verify ownership and liens.
5. Record personal property values including vehicles, retirement accounts like IRAs and 401(k) plans, life insurance cash value, and other significant assets like boats or collectibles worth over $5,000.
6. Total all assets in the designated line. Most forms auto-calculate this if completed electronically, but verify accuracy.
7. List all liabilities starting with real estate mortgages, then credit cards, auto loans, student loans, personal loans, and any unpaid taxes. Include creditor names, account numbers, monthly payments, and total balances owed.
8. Total all liabilities and subtract from total assets to calculate your net worth. This bottom-line number is what lenders use to gauge your financial strength.
9. Sign and date the statement under penalty of perjury. Pennsylvania law requires accuracy since this becomes a legal document in your loan file.
What lenders look for
- Underwriters compare your liquid assets against total debt to verify you have reserves covering at least three to six months of obligations if business income stops.
- Avoid common errors like listing retirement account balances without subtracting early withdrawal penalties or overstating real estate values beyond recent appraisals.
- Discrepancies between what you report and what appears on your credit report will raise red flags and delay approval, so be thorough and honest.