Filling out a personal financial statement means reporting everything you own, everything you owe, and what you earn on a single form, using fair market values you can document and current payoff balances for every debt. The most common version is SBA Form 413, required for most Small Business Administration loan programs and for any owner of 20 percent or more of a business seeking an SBA loan.1U.S. Small Business Administration. Personal Financial Statement Lenders, the SBA, and prospective business partners use the completed statement to judge whether you’re creditworthy. Accuracy is the whole game. Knowingly inflating values or hiding debts on a statement submitted to a federally connected lender is a federal crime carrying up to 30 years in prison and a $1 million fine.
Pull Your Documents Before You Start
Most errors on a personal financial statement happen because someone sat down with the form before gathering the paper that backs it up. Open a folder and collect these first:
- Bank and brokerage statements from the most recent quarter, covering checking, savings, money market, and investment accounts.
- Retirement account statements showing your current vested balance in any 401(k), IRA, or similar plan.
- Mortgage and loan statements with the current payoff balance for every outstanding debt, including car loans, student loans, and personal lines of credit.
- Real estate records such as recent appraisals, tax assessments, or comparable sales for any property you own.
- Life insurance policy declarations showing the cash surrender value, not the face value, of any permanent life insurance.
- Vehicle titles and valuations from a recognized pricing guide.
- Tax returns from your most recent filing year, which help verify income and flag any outstanding tax obligations.
Having these in one place removes the temptation to estimate. Underwriters compare your stated figures against supporting documents, and discrepancies, even innocent ones, slow the process or trigger additional scrutiny.
Personal Information at the Top
The header asks for your full legal name, Social Security number, date of birth, home address, and phone. If you’re married, you’ll typically list your spouse’s name and Social Security number as well, especially if you file taxes jointly. Check that names and Social Security numbers match your federal records exactly. A transposed digit or a maiden name where a married name should be can bounce the application or trigger a mismatch with credit reporting databases.
For an SBA loan, every person who owns 20 percent or more of the business completes a separate Form 413.1U.S. Small Business Administration. Personal Financial Statement That includes sole proprietors, general partners, managing members of an LLC, and anyone personally guaranteeing the loan.
Reporting Your Assets at Fair Market Value
List everything of value you own as of the date on the statement. The goal is a realistic picture of your wealth, not the most optimistic one. Conservative valuations protect you legally and build credibility with underwriters who have seen plenty of inflated numbers.
Cash and Investment Accounts
Start with liquid assets. Enter the current balance in every checking account, savings account, money market fund, and certificate of deposit, using the most recent statement balance. Retirement accounts go here too, but report only your current vested balance, not a projected future value.
For publicly traded stocks, bonds, and mutual funds, use the closing price on the date you prepare the statement. One specific date, one set of prices. Don’t average over a period and don’t round up to a recent high.
Real Estate
Real estate often makes up the largest share of reported assets. Use a recent appraisal if you have one. If not, a comparative market analysis or the assessed value from your most recent property tax bill is a reasonable estimate. The key is external support. A lender will ask where the number came from.
List each property separately with its address and estimated value. If you own rentals, the properties go here as assets, the rental income goes in the income section, and any mortgages on those properties go under liabilities.
Business Interests, Insurance, and Other Property
If you own a closely held business, report your ownership interest based on the company’s book value or a recent formal valuation. Earnings-multiple valuations are common, but be ready to explain your methodology. Lenders are skeptical of high valuations for private companies because there is no public market to confirm the price.
Permanent life insurance is reported at its cash surrender value, which is what you’d actually receive if you canceled the policy today. Not the death benefit, not the face value. If you’ve borrowed against the policy, report the full surrender value here and show the policy loan under liabilities.
Vehicles, boats, and high-value personal property like art or collectibles can be included if you have documented support. A recognized pricing guide works for vehicles. For collectibles, you’ll need a certified appraisal. Leave out everyday household belongings unless the form specifically asks for a household goods estimate.
Reporting Your Income
SBA Form 413 breaks annual income into salary, net investment income, real estate income, and other income. Use your most recent tax return, or current pay stubs if your income has changed since filing.
Salary is your gross pay before taxes and deductions. Net investment income includes dividends, interest, and capital gains after related expenses. Real estate income is your net rental income after operating costs but before mortgage payments. The “other income” line covers anything that doesn’t fit elsewhere, such as freelance earnings, royalties, or regular trust distributions.
One detail people miss: alimony and child support are generally optional to disclose. You don’t have to list them as income unless you want the lender to count them toward your ability to repay. If that income is what makes the numbers work for qualification, include it. Otherwise, you can leave it off.
Listing Your Liabilities
The liabilities section captures every financial obligation you currently owe. Completeness matters more here than anywhere else on the form. Lenders will pull your credit report, and any debt you omit will surface during underwriting. An unexplained gap between your stated liabilities and your credit file raises red flags that can stall or kill the application.
Mortgages are usually the largest line item. Report the current payoff balance from your most recent statement, not the original loan amount. Do the same for car loans, student loans, home equity lines of credit, and any other installment debt. Use the outstanding principal as of today.
Credit card balances go in at the current amount owed, even if you normally pay in full every month. If you happen to be carrying a balance on the date of the statement, report it. Unpaid taxes and outstanding legal judgments also belong here, sourced from the official notice or court record that shows the exact amount.
Disclosing Contingent Liabilities
This is the section people most often skip or underreport, and it causes the most trouble later. Contingent liabilities are debts you might have to pay if certain conditions are triggered. They aren’t current obligations, but they’re real financial exposure.
- Co-signed loans. If you co-signed a car loan for a family member, you’re on the hook if they stop paying, and the whole balance is a contingent liability.
- Personal guarantees. If you guaranteed a business lease or a line of credit for your company, the outstanding balance belongs here.
- Pending lawsuits. If someone has sued you and the case hasn’t resolved, disclose the nature of the claim and the amount at stake.
- Outstanding tax disputes. If you’ve received a notice of deficiency and you’re contesting it, report the disputed figure.
For each item, give the name of the creditor or claimant, the potential amount, and the condition that would trigger your obligation. Lenders take these seriously because a single triggered guarantee can erase the net worth you just reported.
Calculating Your Net Worth
Net worth is the simplest calculation on the form: total assets minus total liabilities. If you own $800,000 in assets and owe $500,000, your net worth is $300,000. If you owe more than you own, the number is negative. That’s a serious obstacle for most loan applications, though not always a disqualifier if income and collateral are strong.
Don’t confuse net worth with debt-to-income ratio, which is a separate metric lenders also care about. Debt-to-income compares your monthly debt payments to your gross monthly income and measures cash flow rather than accumulated wealth.2Consumer Financial Protection Bureau. What Is a Debt-to-Income Ratio? Someone can have a strong net worth and a tight debt-to-income ratio at the same time, or the reverse. Lenders look at both.
If You’re Married
The form typically asks for your spouse’s information alongside your own, but that doesn’t always mean your spouse has to sign or jointly apply. Under Regulation B, which implements the Equal Credit Opportunity Act, a lender generally cannot require your spouse’s signature if you qualify for the loan on your own. The regulation specifically says a lender cannot treat a joint financial statement, by itself, as a joint credit application.3eCFR. 12 CFR 1002.7 – Rules Concerning Extensions of Credit
The major exception involves community property states. If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, your spouse may need to sign instruments that let the lender reach community property if you default.3eCFR. 12 CFR 1002.7 – Rules Concerning Extensions of Credit In those states, assets acquired during the marriage are generally owned equally regardless of who earned the money.4Internal Revenue Service. Publication 555 – Community Property Property you owned before marriage, inherited individually, or received as a gift is generally your separate property. Everything else acquired during the marriage is presumed community. Getting the classification right matters for the lender’s analysis and your own legal protection.
Signing and Submitting
Your signature at the bottom is a legal certification that everything you’ve reported is true and complete. That’s the line between a rough draft and a binding document that can be used against you if the numbers turn out to be wrong on purpose.
Most lenders accept electronic signatures, which carry the same legal weight as ink under federal law.5Office of the Law Revision Counsel. 15 USC Chapter 96 – Electronic Signatures in Global and National Commerce Some lenders, particularly on SBA loans, still require a notarized signature. Notary fees vary by state, typically ranging from $2 to $25 per signature, with most states falling between $5 and $10.
Submit through the channel the lender specifies, usually a secure borrower portal or certified mail. Keep a complete copy of the signed statement and all backup documents, because underwriters frequently come back with questions weeks later. Financial data goes stale quickly. If more than 90 days pass before closing, most lenders will ask you to prepare an updated statement.
What Happens If the Numbers Are Wrong on Purpose
Inflating asset values or hiding debts on a personal financial statement submitted to a federally connected lender is a federal crime under 18 U.S.C. ยง 1014. The statute covers false statements made to influence any FDIC-insured bank, credit union, the SBA, or any entity making federally related mortgage loans. Penalties run up to $1 million in fines, up to 30 years in prison, or both.6Office of the Law Revision Counsel. 18 USC 1014 – Loan and Credit Applications Generally; Renewals and Discounts; Crop Insurance
The word “knowingly” in the statute matters. An honest mistake in estimating the value of a rental property won’t land you in prison. Rounding your home’s value up by $200,000 because you need the net worth to qualify, or leaving a six-figure debt off the form entirely, crosses the line. Prosecutors look at the gap between what you stated and what you knew, and lenders document everything.
The safer approach is simple. Use conservative valuations. Disclose every liability you’re aware of. Base every number on a document you can produce. If a value is genuinely uncertain, note that the figure is an estimate and explain your basis. Lenders respect transparency far more than optimism.