Alright, let’s dive into this together! The plan today is to help you clearly understand how to fill out your SBA personal financial statement. You ready? Okay, let’s go.

The Real Deal about SBA Loans

You know, there’s this tall tale floating out there that the SBA just hands out loans to entrepreneurs. That’s far from the truth. When you fill out an application for an SBA loan, it travels not to the SBA, but a bank or another lender approved by the SBA. Not so scary, huh?

The role that SBA plays is it ‘guarantees’ the loans sanctioned under its program. In effect, they act like your buddy vouching for you, promising to pay back a part of the debt if things go awry.

So, to make sure it doesn’t come to that, they need your SBA personal financial statement included in your application. This document is important because it convinces the loan officer that you’ve got the financial chops to handle your loan.

Who Should Submit an SBA Personal Statement?

Not every Joan and Joe in your company needs to submit a personal financial statement. If you’re asking for a 7(a)/504 or 8(a) loan, it hinges on the equity you have in your company.

For those getting 7(a)/504 loans, if you hold more than 20% equity, you’ve got to offer up an SBA personal financial statement. That’s a must, whether you’re the company owner, partner, managing member of an LLC or even a spouse or child with over 20% equity – even if you’re not a part of the daily grind.

In case of joint tax returns with your spouse, they need to submit a personal financial statement too. However, whether they end up as a guarantor will depend largely on your individual circumstances.

The standards are slightly different for the 8(a) loan, intended for those claiming an economic disadvantage. Here, if you hold over 10% equity in the business, you’re required to submit a financial statement.

What Documents You Need Handy

But before you get started, make sure you have all your ducks in a row. The list might seem a bit long, but preparation is key to getting it right. I’m talking everything from bank statements to life insurance statements, from pay stubs to liabilities like mortgage and credit card statements. And don’t forget those statements for current value of stocks, bonds, and other investments.

Remember, each one should show an account number, payment amount, and current balance. If you have quarterly statements, use the most recent one for the latest information.

The Assets Column

Now, let’s tackle the assets section. This is where you list all your different incomes. You’ve got a space for cash on hand/in banks, savings account, IRAs or other retirement accounts, real estate, your vehicle, life insurance, collectibles, and your ownership interest in your firm. The SBA is interested in knowing about any other assets you might have as well.

The Flip Side: Liabilities Column

Liabilities refer to your expenses and debt. Include things like your accounts payable, repayment amounts for personal loans – be they from people you know, financial institutions or your business, loans on life insurance, mortgages on real estate, unpaid taxes, and any other liabilities.

To calculate your total liabilities, simply add them all up. Then, to calculate your net worth, subtract “Total Liabilities” from your “Total Assets.”

Remember to be thorough and accurate when filling out your SBA personal financial statement. The SBA will use this to gauge whether they can put their money on the line for you. Borrowing more than you can comfortably afford is not a good road to go down. For more assistance, or advice on managing an SBA loan default, check out Lawscape website.

In Conclusion

At Lawscape and Lawscape, we’ve helped our clients handle SBA Debt Issues successfully, without resulting in Bankruptcy or Home foreclosure. We are authorized by the Agency Practice Act to defend debts before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.

I hope this makes the process of filling out your SBA personal financial statement a little bit clearer. We’ll get you through this, promise.