The most widely used liquidity statement template is SBA Form 413, the Personal Financial Statement, available as a fillable PDF directly from sba.gov.1U.S. Small Business Administration. SBA Form 413 Personal Financial Statement It’s the standard for 7(a) loans, 504 loans, disaster loans, surety bond guarantees, and certifications like the Women-Owned Small Business and 8(a) Business Development programs. If you’re applying for a conventional commercial loan instead of an SBA-backed one, the bank will usually push its own template through a secure portal. The fields are similar, but confirm you’re on the current version. Outdated forms can lack required disclosures or fail to process through the lender’s system, which delays everything.
What the Template Asks For
A liquidity statement is a snapshot of what you own in accessible funds minus what you owe in the short term. Lenders use it to confirm you can cover a down payment, closing costs, or the first months of debt payments on a commercial loan. The form itself is split into two sides: assets and liabilities. Your net liquid worth is the difference.
Before you start typing numbers in, pull your most recent monthly statements for every account you’ll list. Rough estimates and app balances will not match what the underwriter sees during verification, and mismatches create credibility problems even when the explanation is harmless.
Filling In the Asset Side
Start with cash and cash equivalents. List balances in checking and savings accounts at federally insured banks using the figure from your most recent monthly statement. Money market accounts belong here too. Certificates of deposit go in this section, but note the maturity date, since breaking a CD early usually triggers a penalty that reduces its effective liquid value.
Next come marketable securities: publicly traded stocks, corporate bonds, mutual funds, and exchange-traded funds. Value these at current fair market price, not purchase price and not a hoped-for future price. Enter specific details for each holding: the number of shares, the name of the security, and the current market value. Vague descriptions like “various stocks” invite follow-up requests that slow the application.
SBA Form 413 also includes lines for accounts and notes receivable, the cash surrender value of life insurance policies, and your equity interest in businesses you own.1U.S. Small Business Administration. SBA Form 413 Personal Financial Statement Two common mistakes to avoid:
- On life insurance, list the cash surrender value (what the insurer would pay you today if you canceled), not the face value (what the policy pays on death). Lenders care about the first number.
- On business ownership, list the value of your equity stake, not the company’s assets and debts. Putting the business balance sheet on your personal statement double-counts anything already captured there.
If an account is held jointly with a spouse or business partner, the form asks you to indicate ownership percentages or to include the co-owner’s financial picture. SBA Form 413 requires completion by each individual and the spouse of any owner with 20% or more equity when spousal assets are included.1U.S. Small Business Administration. SBA Form 413 Personal Financial Statement
Filling In the Liability Side
The liability section captures credit card balances, personal loans, auto loans, mortgages, lines of credit, and any unpaid taxes. Use the most recent statement cycle balance for every account. If you paid down a credit card after the statement closed, use the statement balance, not the lower number in your app. The lender’s verification pulls the same statement data.
For revolving accounts with variable rates, use the current outstanding balance rather than the credit limit. You’ll also report installment payments coming due in the next twelve months, which tells the underwriter how much cash existing obligations will consume before any new debt enters the picture.
Contingent liabilities, such as cosigned loans or pending legal judgments, get their own section on most templates. Put them there. Don’t bury them in the main liability list and don’t leave them off. They surface during verification regardless.
The core calculation is straightforward: total liquid assets minus total current liabilities equals your net liquid worth. That single number tells the underwriter whether you have a cushion or whether you’re stretched thin.
How to Handle Retirement Accounts
Retirement accounts sit in a gray area. They appear in the asset section of SBA Form 413, but lenders treat them differently from a checking balance because accessing the money before age 59½ typically triggers a 10% additional tax on top of regular income tax. That penalty reduces the effective liquid value of the account by at least 10%, and more once income tax is factored in. For a SIMPLE IRA withdrawn within the first two years of participation, the penalty jumps to 25%.2Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
Roth IRA contributions (not earnings) can be withdrawn at any time without taxes or penalties, which makes them more liquid than traditional retirement accounts. For earnings in a Roth, you generally need to be over 59½ and have held the account for at least five years to avoid the penalty.
Report the balances honestly, but don’t lean on them as your primary proof of accessible funds. Most underwriters mentally discount retirement figures when assessing true liquidity, so a large 401(k) will not substitute for thin non-retirement cash.
What You’re Signing
SBA Form 413’s certification states that by signing, you certify “under penalty of criminal prosecution that all information on this form and any additional supporting information submitted with this form is true and complete to the best of my knowledge.” The form does not require notarization. It requires your signature and your acknowledgment that you’ve read the required legal disclosures. Some commercial lenders require notarization as a matter of policy, but that’s lender-specific, not a universal legal requirement.
Inflating assets or hiding liabilities on a financial statement submitted to a federally insured lender is a federal crime under 18 U.S.C. § 1014. The statute covers anyone who knowingly makes a false statement to influence a bank, credit union, the SBA, or any other federally insured financial institution in connection with a loan, insurance agreement, or commitment. A conviction carries a fine of up to $1,000,000 and up to 30 years in federal prison.3Office of the Law Revision Counsel. 18 USC 1014 – Loan and Credit Applications Generally Beyond criminal exposure, a lender who discovers misrepresentations can demand immediate full repayment and will blacklist you from future lending with that institution.
Liquidity Statement vs. Proof of Funds Letter
A liquidity statement is not the same thing as a proof of funds letter, and the two are not interchangeable. A proof of funds letter is a short document, usually issued by your bank, confirming that a specific dollar amount is available in your account on a given date. It answers the narrow question of whether you have the cash right now, which is what a real estate seller wants to see before accepting an offer.
A liquidity statement maps your full financial picture: all assets, all liabilities, and your net worth. Lenders making a multi-year lending decision require the statement because they need to know whether you can sustain the obligation given everything else you owe. If a seller or counterparty asks for proof of funds, a liquidity statement is not what they’re asking for.
Both documents have a shelf life. Proof of funds letters are typically expected to be dated within 30 to 90 days of submission, and 30 days is safer for competitive real estate offers. Liquidity statements for commercial lending carry a similar window. If your application stretches past it, expect to update your figures before closing.
What Happens After You Submit
Underwriters typically spend five to ten business days cross-referencing your numbers. They pull credit reports, contact your banks for account verifications, and may request IRS transcripts through Form 4506-C to compare your reported income and assets against your tax returns.4Internal Revenue Service. IVES Request for Transcript of Tax Return That form authorizes the IRS to release your return transcript, account transcript, or wage and income records directly to the lender’s third-party verification service.
Large recent deposits are a common trigger for follow-up requests. If $40,000 appeared in your checking account two weeks before your application, expect a letter asking where it came from. Gift funds, inheritance distributions, and property sale proceeds all require supporting records. Respond with documentation rather than narrative explanations.
Keep copies of everything you submit. If a discrepancy surfaces weeks into the process, you’ll want to trace it back to the specific statements and figures you used, not reconstruct from memory. The applications that close smoothly are the ones where every number on the liquidity statement matches what verification turns up.