Personal Financial Statement FAQ’s from Coffman Capital

Apr 28, 2020 | Articles, Coffman Capital, Personal Financial Statement

Personal Financial Statement FAQ’s from Coffman Capital

Perhaps the most important form in a loan package concerning the borrower is the Personal Financial Statement or PFS.  The SBA form for this is called the 413 Personal Financial Statement.  Paradoxically, since it is a government form, it is actually simpler than many of the PFS forms banks use or incorporate into their long-form loan applications.  There are some simple tips that will help you complete the form so that it is best understood by the lender evaluating the application, and to make sure you include what they need to know.

CLICK HERE TO DOWNLOAD THE PERSONAL FINANCIAL STATEMENT FAQ’s PDF

Here is a list of things to keep in mind while you’re filling it out, starting on the left side with Assets, then Liabilities on the right:

  1. This is a “snap-shot” of your financial condition, so when you’re completing it, furnish the data as it is at date of the form. For example, if you expect to receive funds or pay off a loan, you may need to update it during the loan process, but you submit it as it is at the time.
  2. Business Name of Applicant – Your business is the borrower. If you are using an existing or newly created entity, that name goes here.  If not, please use New Entity, d/b/a the business name you are buying.
  3. Cash on Hand and in Banks & Savings – put all the current balances you have, on whichever line seems right. A lender will combine these two as your “current liquidity” which is very important.

Note: You can include amounts you keep in cash in a safe etc., and if you need to deposit it in a bank, we can help you determine how best to document it.

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2nd Note: This may or may not include business bank balances – remember they’re looking for total liquidity and this is where they look for it – just saying.  It’s a judgment call, you may ask your Coffman representative to help you on this as we do with the entire form.

  1. Accounts Receivable – These are personal receivables for any personal loans etc. Gifted Funds not yet deposited go here as a receivable, attaching the signed Gift Letter (ask your Coffman representative) and named in Section 5 to explain it.   Business Receivables are included in the value of your business (Other Assets), so you do not need to list them here.  If you are a sole proprietor and believe it’s an important item, please attach and aging schedule to verify them.
  2. Life Insurance – if you have a term policy, that’s zero as an asset. If you have a cash value policy, it is the amount you would get to surrender it.  On page 3, please put the company, insured & beneficiaries.
  3. Real Estate – this is the amount you think it is worth today – and mortgages go under Liabilities. If the spaces on page 2 of the form aren’t enough, Coffman Capital can provide a schedule to help.
  4. Autos – remember to put year/make/model on page 2, section 5. Don’t over-think the value, just a guess will do – the lender will discount it to almost nothing for collateral.
  5. Other Personal Property – commonly, a combined figure for personal property, furniture, jewelry, electronics, collections etc. is fine, without any sort of list (see Section 5, page 2). If you feel it’s important to declare a certain item by itself, you can do so.  Note: Coffman Capital has a Section 5 Addendum you can use to more easily break down all of this, only because the form may not give you enough room.