Step-by-step instructions for filling out the Personal Financial Statement.
You likely heard that a Small Business Administration loan requires a lot of time and paperwork to apply for. If you’re interested in an SBA 7(a) loan, 504 loan or a guaranteed surety bond, the mountain of forms you face includes SBA Form 413 — the Personal Financial Statement.
To keep mistakes — and, therefore, the possibility of rejection — to a minimum, you’ll want to understand the steps to accurately completing this three-page form, including any confusing terms or areas the government doesn’t make so clear.
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What’s the SBA Form 413?
SBA Form 413 is the Personal Financial Statement, a required part of the SBA 7(a) or 504 loan application that business owners must submit. If your business is applying for a guaranteed surety bond, you’ll need to also submit a completed Form 413.
Your potential lender uses this form to ensure that you’re eligible for an SBA loan based on your personal finances. Overall, it helps your lender determine whether you’re likely to repay your loan.
Who needs to fill out SBA Form 413?
Most SBA applicants will find they need to complete and submit a separate SBA Form 413, including:
- Business owners or proprietors
- General partners or managing members of an LLC
- Anyone who owns more than 20% of equity in the business
- Anyone or any company that is partially backing the loan
What information do I need to fill out Form 413?
To accurately complete Form 413, you’ll need gather information on your personal finances up to the last complete month before you plan on submitting your SBA application. For instance, if you’re looking to submit your application on June 8th, you’ll need information on your finances up to May 31st. And if you file a joint tax return, you’ll have to include your spouse’s assets as well.
To avoid scrambling at the last minute, gather together these documents before you get started:
- Statements from all bank accounts in your or your spouse’s name
- Statements from all retirement accounts in your or your spouse’s name
- Documents showing the value of any stocks, bonds and other investments
- Life insurance statements showing your policy’s cash value
- Pay stubs showing your and your spouse’s annual salary
- Statements with details for other sources of income, including pensions, real estate income and Social Security
- Statements for all loans, credit cards and other types of debt in your or your spouse’s name
- An appraisal on any real estate properties and vehicles you or your spouse own
- Information on any taxes you might still owe on the state or local level
Because information on your taxes is often difficult to keep track of, you might want to contact your CPA for the most accurate information.
It might also be helpful to request a copy of your credit report. It’s the document your lender will use to verify your debts, and you can be sure you’re categorizing all your debts and income in the correct categories.
How to fill out SBA Form 413 in 11 steps
Got everything you need? Get started by making sure your form is the most recent version. You can do this by confirming the expiration date in the top right corner. If your form is out of date, search for the most recent SBA Form 413 on the Small Business Administration’s website.
Depending on the time of year, the form you find online may not yet have been updated. In that case, reach out to your lender for the most current form.
To minimize mistakes that come with unclear penmanship, consider typing the information directly into the form using a PDF reader like Adobe Reader. If you use Chrome, the form may automatically open in a new tab and include fields you can type in. Otherwise, neatly complete the form by hand in dark ink.
Step 1. Your basic contact and business information
At the form’s top right, you’ll see an As of blank — this indicates to the government the date up to which the information in your form is current, typically the last day of the previous month. For example, if you’re filling out your form in May 2018, you’d write in “April 30, 2018.”
The rest of the top fields is easy to complete: Fill in your name, home address, home and business phone number and your business’s name as it appears on your tax return. If you’re married, write both your and your spouse’s name. If you don’t have a landline, include your cell phone number.
Step 2. Assets
Rounding up to the nearest dollar, write the total amount you own for each type of personal asset listed in this section. If you file a joint tax return with your spouse, include the total amount for the two of you.
|Type of asset||What to include|
|Cash on hand and in banks||Your and your spouse’s checking account balances.|
|Savings accounts||Funds in your and your spouse’s savings accounts, CDs and money market accounts.|
|IRA or other retirement account||Funds in any IRA, 401(k) or other retirement accounts for you and your spouse.|
|Accounts and notes receivable||The amount of any loan you’ve personally funded in the past year. (This section is rarely used.)|
|Life insurance — cash surrender value only||If you have a life insurance policy that comes with a cash payout if you cancel it, write the total amount you’d receive. This only applies to whole life policies, not term life.|
|Stocks and bonds||The to-date value of all securities you and your spouse own.|
|Real estate||The value of all property you and your spouse own, including commercial and residential real estate.|
|Automobiles||The current value — not what you originally paid — of all cars and other vehicles, like boats or planes, with a title in your or your spouse’s name. Exclude any leased vehicles.|
|Other personal property||Anything valuable property that you own, such as your house, art, gold or precious stones, antiques and expensive electronics. Basically, what you’d get if you had to sell all of your possessions.|
|Other assets||Anything else that doesn’t fall into the previous categories, including the value of your ownership stake in any business based on its net worth. Net worth means the amount the business is worth minus any liabilities, like debts and expenses.|
|Total assets||Add up all values you entered in this section.|
Step 3. Source of income
Enter all employment, investment and other regular sources of income for you and your spouse.
|Income||What it includes|
|Salary||All annual wages you and your spouse earn as reported on your W2 or 1099. Don’t include any money you earn as an owner of the company — that counts as “other assets.”|
|Net investment income||All interest earned on securities and income from dividends.|
|Real estate income||Your net income from rent on all real estate properties. In other words, not the amount you earn from rent alone, but your income after you’ve covered all expenses.|
|Other income||Any regular money you have coming in to your household, including pensions, disability, child support and alimony.|
If you have other sources of income that don’t fit the categories above, describe them in Description of other income in Section 1 below.
Step 4: Liabilities
Rounding up to the nearest dollar, list the following personal costs for you and your spouse.
|Liability||What to include|
|Accounts payable||Any products or services you regularly buy on store credit or through recurring payments. This doesn’t include costs you pay for with a personal credit card or line of credit. It’s rare that you’ll complete this section, but an example might include equipment you won’t pay for until you receive it.|
|Notes payable to banks and others||Your balance on all personal credit cards and personal lines of credit. You might want to reference your personal credit report to make sure you don’t miss an account.|
|Installment account (auto)||The balance of all car, motorcycle, boat, plane and other vehicle loans. If you look at your credit report, these liabilities are lines with “Auto debt” next to them. Write your total monthly payments in the Mo. payments line below.|
|Installment account (other)||The balance on all other loans you’re paying back with terms of longer than one year — like personal and student loans. Write your total monthly payments in the Mo. payments line below.|
|Loan(s) against life insurance||The balance of any loan you’ve taken out using your life insurance policy as collateral. Again, this applies only to whole life insurance policies.|
|Mortgages on real estate||The balance of any personal mortgages — not the original amount you borrowed.|
|Unpaid taxes||Any local taxes on property, real estate, school or anything else you owe the government after filing your most recent tax return.|
|Other liabilities||Any other debts or personal costs, including money you owe to foreign governments, like unpaid taxes; informal loans from friends or family; money you expect to pay in legal fees; and any other pending expense.|
|Total liabilities||All up all values you entered in the Liabilities section.|
|Net worth||Subtract your total liabilities from your total assets to find your net worth. Write that number here.|
|Total liabilities and net worth||This should be the same value as your total assets.|
Step 5. Contingent liabilities
Contingent liabilities are debts that you might be on the hook for, but aren’t set in stone — like estimated taxes.
|Liability||What to include|
|An endorser or co-maker||The balance of any loans for which you or your spouse cosigned.|
|Legal claims and judgments||Any potential lawsuits or judgment payments you or your spouse might have to pay. These amounts should show up on your credit report.|
|Provisions for federal income tax||Any funds you or your spouse set aside to pay your federal income taxes, typically deducted from your paycheck. You can find this amount on your pay stubs.|
|Other special debt||Any other miscellaneous debts.|
Step 6. Notes payable to banks and others.
Under Section 2, complete the table with details of all debts you included as a liability, such as credit cards, car loans, student loans and mortgages. You can attach another sheet if you need more space. Just be sure to include the as-of date, “SBA Form 413 — Section 2” at top left and your signature.
|Column||What to write|
|Name and address of noteholders||For each debt that appears on your credit report, write the name and address of your creditors. You might have to use abbreviations to make it fit — and that’s OK. If you have several loans or credit cards from one bank, list the last four numbers of the account. That way, your lender can match it with your credit report.|
|Original balance||On credit cards and lines of credit, this is $0. Otherwise, write in the amount you borrowed.|
|Current balance||Write the amount you owe on each account as of your form’s as-of date at top right. This could be $0 if you’ve paid off your credit card debt.|
|Payment amount||The amount you pay each month for each debt. If you pay different amounts each month, like with credit cards, write “varies.”|
|How secured or endorsed — type of collateral||If you have collateral backing any of your loans, describe it here. If not, write “unsecured.”|
Step 7. Stocks and bonds
Under Section 3, complete the table with details on the stocks and bonds you included as an asset. Like with the previous section, you can attach another sheet if necessary as long as you include your form’s as-of date, “SBA Form 413 — Section 3” at top left and your signature.
|Column||What to write|
|Number of shares||How many shares you own for this particular stock or bond.|
|Name of securities||The name of your stock or bond.|
|Cost||How much it cost per share when you originally bought it.|
|Market value quotation/exchange||How much your stock or bond is worth on the as-of date per share.|
|Date of quotation/exchange||The day you checked the value of your stock or bond, which should be the same as your form’s as-of date.|
|Total value||The market value of your shares multiplied by the number of shares you own.|
Step 8. Real estate owned
In Section 4, complete the table with more details of any real estate property you own. Of the three columns listed, “Property A” is your primary residence, if you own your home. List each property separately.
As with the previous two sections, you can attach another sheet if necessary as long as you include your form’s as-of date, “SBA Form 413 — Section 4” at top left and your signature.
|Row||What to write|
|Type of real estate||The category of real estate your property falls under. For example, your home counts as your “primary residence.” Other types of real estate include investment properties and undeveloped lots.|
|Address||The address you write on your personal tax return for this property.|
|Date purchased||The date on your mortgage bill of sale.|
|Original cost||The price you paid for the property.|
|Present market value||The appraised value of your property as of your form’s as-of date.|
|Name and address of mortgage holder||The name and address of the lender that approved your mortgage.|
|Mortgage account number||Your full mortgage account number, which you can find on your statement.|
|Mortgage balance||How much you owe on your mortgage by the as-of date.|
|Amount of payment per month or year||Your monthly or annual payment. If you’ve already paid it off, write “N/A.”|
|Status of mortgage||Either “current,” “foreclosure” or “paid in full.”|
Step 9. More details on assets, liabilities and life insurance
Sections 5 through 8 are relatively straightforward: You’re just elaborating on other assets and liabilities you counted in the first part of this form, but not in nearly as much detail.
Section 5. Personal property and other assets
List each item you counted as “Other personal property” in the Assets section. If you’re using any of these assets as collateral for a loan or other type of credit, list the name and address of the creditor, how much you borrowed, your repayment amounts and how often you make repayments.
Section 6. Unpaid taxes
Describe any taxes you still owe the state and local government — what you counted as “Unpaid taxes” in the Liabilities section. Include whether you owe your taxes to the state or local government, how much you owe and the terms for payment. Also include any collateral, if applicable.
Section 7. Other liabilities
Describe any other debts that you counted as “Other liabilities” in the Liabilities section. Write what it is, how much you owe, who you owe it to and a description of how you plan to repay it. If you make regular repayments, include how much and how often.
Section 8. Life insurance held
If you or your spouse have a life insurance policy, include the name of each policy, the current value of the policy if you cashed it in on your form’s as-of date, the insurance company and the beneficiaries.
Step 10. Certification
Read the certification and authorization statements before writing your name, date and Social Security number and signing the form. If your spouse’s information is included in this form, have them write their name, date and Social Security number and sign the form as well.
Step 11. Triple-check and review
Read the notice to loan and surety bond applicants under the Certification section carefully. If you knowingly provide false information — or intentionally leave something out — you could face a hefty fine and even jail time.
It’s unlikely that you’ll go to jail for making an honest mistake. But you could get rejected if you make a miscalculation or don’t include everything that appears on your credit report. After you’re certain you’ve included all necessary information, triple-check your math and maybe even have someone else take a pass at it.
I filled out the form. Now what do I do?
It depends on what type of loan your business is applying for:
- SBA 7(a) loan applicants submit the form to the lender processing your application.
- SBA 504 loan applicants submit the form to the certified development company processing your application.
- Surety bond applicants submit the to the surety company or agent processing your application.
Submit it as soon as possible to speed up the application process and to ensure that your form’s as-of date is the last day of the previous month.