What this form is for
Banks and SBA lenders require this form when you apply for a business loan to evaluate your personal creditworthiness and capacity to repay. It shows your complete financial picture outside the business itself, which matters because many small-business loans require personal guarantees.
Before you start
- Recent statements for all bank accounts, brokerage accounts, retirement accounts (401k, IRA), and certificates of deposit
- Current market values for real estate you own, vehicles, and any other significant assets like boats or collectibles
- Mortgage statements, auto loan balances, credit card statements, student loans, and any personal notes payable
- Recent pay stubs or tax returns if you have W-2 income separate from your business
- List of life insurance policies with cash surrender values and any outstanding policy loans
Step-by-step
1. Complete the personal information section at the top with your legal name, current address, Social Security number, and date of birth. If married, include spouse information even if they are not a co-borrower.
2. List all cash and liquid assets with exact account numbers and current balances. Include checking, savings, money markets, and any cash on hand over 500 dollars.
3. Itemize securities and investments separately from cash accounts. Show stocks, bonds, mutual funds, and brokerage accounts by institution with current market values, not what you originally paid.
4. Record all real estate you own with property address, original purchase price, current market value, and outstanding mortgage balance. Texas is a community property state, so disclose all marital property even if titled in only one spouse's name.
5. List other personal property including vehicles with make, model, year, and current value, plus retirement accounts, life insurance cash value, and any business interests you hold.
6. Total all assets. Most forms have a line for this subtotal. Double-check your addition.
7. List all liabilities including mortgages, vehicle loans, credit card balances, student loans, personal loans, taxes owed, and any contingent liabilities like co-signed debts.
8. Total all liabilities, then subtract total liabilities from total assets to calculate your net worth. This bottom-line number is what lenders care about most.
9. Sign and date the form. Your signature certifies accuracy under penalty of perjury.
What lenders look for
- Banks look for liquid assets that equal at least three to six months of proposed loan payments, not just high net worth tied up in home equity or retirement funds you cannot easily access.
- Common mistakes include forgetting to list credit card debt, omitting contingent liabilities, or inflating asset values beyond realistic market prices. Lenders verify these numbers.
- In Texas, homestead protections are strong, so lenders pay close attention to liquid and non-homestead assets when evaluating repayment capacity.