How to fill out a personal financial statement – SBA Form 413

A Small Business Administration (SBA) loan is often one of the best types of loans for small business owners because of lower rates and long repayment terms. The SBA – a federal agency – guarantees part of these traditional loans with government funds to reduce the risks lenders take when lending funds to small businesses. As a result, these borrowers can access better loan plans. But because of this guarantee, SBA loans may have long application processes with heavy documentation requirements.k.

One of the most important pieces of documentation to have when applying for an SBA loan is SBA Form 413. Here are some tips for filling out SBA Form 413 so that you maximize your chances of qualifying for a loan.

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What is SBA Form 413?

SBA Form 413 is a personal financial statement that provides lenders with an overview of your current financial situation, allowing them to analyze your assets and liabilities. Understanding your circumstance can help a lender determine your ability to repay a loan. Be sure to report your finances accurately and completely – any missing or incorrect information may cause the lender to reject your application, extending your funding timeline.

How to fill out SBA form 413

Below are some  tips to help you fill out SBA Form 413.

1. Provide basic business information

The basic information section is the most straightforward. You’ll only need to provide your personal contact information, such as your name, the name of your business, your home address, and your phone number. You should also include your spouse's name if you’d like the lender to consider their financials as part of the loan application.

Additionally, you’ll need to fill in the “as of” section with the date up to which your financial information is accurate. If you don’t know, just put the final calendar day of the month in which you’re applying. Out-of-date information can interfere with the lender's valuation of your financials and may lead to your loan application being rejected.

2. Report your assets

After filling out your basic information, you’ll detail most of your assets and their amounts. You can round each amount to the nearest dollar. The values you’ll need to add in this section are the following:

  • Cash on hand and in banks. Enter the total of all the money in your and your spouse’s checking accounts.
  • Savings accounts. Enter the total of all the money in your and your spouse’s savings accounts. Be sure to include the money you have in money market accounts and certificates of deposit too.
  • Retirement accounts. Enter the total of all the money in your and your spouse’s retirement accounts, including IRAs.
  • Accounts and notes receivable. You likely only need to fill in this information if you’ve personally loaned money to a third party. This section accounts for the money that these third parties still owe you.
  • Life insurance—cash surrender value only. Enter the amount of money you’d receive if you cancel a life insurance policy that includes a payout. You only need to complete this section if you’ve taken out whole life insurance policies rather than term life insurance policies. Note what you include here for section eight of your form.
  • Stocks and bonds. Enter the current value of all stocks and bonds that you and your spouse own.
  • Real estate. Enter the total current market value of all commercial or residential properties you and your spouse own. Note what you include here for section four of your form.
  • Automobile. Enter the total current market value of all vehicles you and your spouse own. Include boats and planes alongside cars if you own those, but you likely don’t need to include anything you lease instead of own.
  • Other personal property. Enter the total price of all the other valuable material items you own and could sell for cash. Common examples include furniture, jewelry, electronics, and antiques. You’ll need this information again in section five of the form.
  • Other assets. Enter the approximate value of all your other assets. In this context, assets include your interest or equity in your business. You’re best off obtaining this number through a professional valuation. You’ll also need it again in section five.
  • Total assets. Add up the total amount of everything above, then enter it on the line.

3. Report your liabilities

In the next section, you’ll report you and your spouse’s current liabilities. You should round your liability values up to the nearest dollar. Here is the information you will likely need to have on hand:

  • Accounts payable. This section covers any money you owe to third parties that aren’t banks.
  • Notes payable to banks and others. Here you’ll enter all of the outstanding balances on your personal credit cards, business loans, and business lines of credit. You’ll need this information again in section two of the form.
  • Automobile installment account. Describe your total and monthly payments for  any car loans.
  • Other installment accounts. Enter the total and monthly payment amount of any other monthly-payment loans you currently owe. This section includes student and personal loans.
  • Loan against life insurance. Enter the balance of any current loans for which your whole life insurance policy is collateral.
  • Mortgages on real estate. Enter the amount of money you still owe on your real estate mortgages. You'll detail this information further in section four of the form.
  • Unpaid taxes. Here, you’ll enter the amount of taxes you have yet to pay since the most recent tax return you filed. You'll come back to this information in section six.
  • Other liabilities. Enter the total amount of all your other debts. You’ll get more into this in section 7 of the form.
  • Total liabilities. Add all the above liabilities and enter the sum here.
  • Net worth. Your net worth is the difference between your net assets and net liabilities.
  • Total. Add the above two lines. This value must be the same as your total assets.

4. List your source of income and contingent liabilities to complete section 1

Next is  section 1 of SBA Form 413. Here, you’ll detail your and your spouse’s income sources and contingent liabilities. A contingent liability is a debt that kicks in only under certain conditions.

The form 413 income sources section will ask for the following:

  • Salary. Enter the total annual salaries for you and your spouse. Use the amount from your most recent tax returns.
  • Net investment income. Enter the amount of income you’ve earned as investment dividends or interest.
  • Real estate income. This figure is the net income you earn from owning real estate. An example could be the income you earn as a landlord for a housing unit. Note that real estate income refers to the amount that remains after your expenses.
  • Other income. Enter the amount of income you earn from any other sources. That might include child support, alimony, pension, and government benefits.

The contingent liabilities section includes:

  • Endorsement or co-making. Enter the total amount of the debts on which you or your spouse is a guarantor or co-signer agreeing to repay someone else’s debts if they can’t.
  • Legal claims and judgments. Post the total sum you could wind up owing based on pending legal claims or judgments.
  • Provisions for federal income tax. Disclose the amount of money you’re reserving to cover federal taxes that result from future income increases after litigation or asset sales.
  • Other special debt. Write the total amount of all your other contingent debts.

5. Detail your notes payable to banks and others in section 2

Section 2 is where you go into additional detail about your notes payable from section 1. Although SBA Form 413 includes a table where you can get into these details, if you need more space, you can include an additional sheet. You’ll want to take good care to include the following for each note payable:

  • Name and address of the noteholder. This is the name and address of the person or institution to which you owe money.
  • Original balance: Here, you’ll detail how much you owed when you first took out the payable note. Write $0 for credit cards and lines of credit and your total loan amount for any installation loans you’re still repaying.
  • Current balance: This figure is the amount you currently owe.
  • Payment amount: This figure is the amount you pay per month for each debt. For a credit card or line of credit, you can write “varies.”
  • Frequency: State whether you pay your loan debts daily, monthly, weekly, or on some other repayment schedule.
  • How secured or endorsed/type of collateral: Detail the collateral you used to secure your loan. If you didn’t need collateral, simply write “unsecured.”

6. Detail the status of your stocks and bonds for section 3

In section three, you’ll elaborate on your and your spouse’s stocks and bonds. As with section two, you can add additional sheets if necessary to provide a full report. Some specific information you’ll provide is:

  • Number of shares. The total of your and your spouse’s shares of the security in question.
  • Name of securities. The name of the stock, bond, or option in question.
  • Cost. The original cost of the security.
  • Market value quotation/exchange. The security’s current market value.
  • Date of quotation/exchange. The date corresponding to this market value.
  • Total value. The product of how many shares you (and your spouse) own and their current value.

7. Complete section 4 with real estate details

In section four, you’ll go into detail about the real estate you own. You’ll likely need to add this information:

  • Type of real estate. Enter details about your primary residence, any investment properties, or undeveloped lots you may own.
  • Address. Write the address of each property.
  • Date purchased. The date you acquired a mortgage, typically listed in your mortgage documentation.
  • Original cost. The market cost of the property.
  • Present market value. The current market value of the property. Professional evaluation of the property can help you determine this value more accurately.
  • Name and address of mortgage holder. Details about the bank that holds your housing loan.
  • Mortgage account number. You can find his number on your mortgage statement.
  • Mortgage balance. The remaining balance of your mortgage.
  • Amount of payment per month or year. The total amount of your monthly or yearly mortgage bill. If your mortgage is paid off, write N/A here instead.
  • Status of mortgage. List the status of your mortgage as either “current,” “foreclosed,” or “paid in full.”
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8. Fill out sections 5 through 8

Sections five through eight differ from the previous sections in that they’re all long-form descriptions, not numbers. You’ll provide written information about your personal property, unpaid taxes, other liabilities, and life insurance.

  • Section 5: Personal property

List and summarize the various personal items you valued in the previous sections in as much detail as possible and provide documentation that proves their value. If there’s no documentation readily available, you can estimate, but don’t intentionally undervalue or overvalue anything.

  • Section 6: Unpaid taxes

In this section, you’ll add more details about the unpaid taxes you listed in the liabilities section. You should explain the amount of taxes you owe and when they’re due, and indicate any assets on which a tax lien exists.

  • Section 7: Other liabilities

Explain the items you listed as “other liabilities” earlier. You should state the type of debt and the person or entity to whom you owe it. You should also state how much you owe and detail your repayment schedule.

  • Section 8: Life insurance

This is the final section of SBA Form 413. Here, describe your life insurance policies and their cash surrender value and death benefit. You’ll want to indicate each plan’s carrier and the names of your beneficiaries.

9. Review the completed form

After completing all the previous sections go over it all to make sure it’s accurate.  False or misleading statements on the document can cause your application to be rejected or, if made knowingly, lead to criminal repercussions.

10. Sign and date

Lastly, you and your spouse must sign SBA Form 413 with a signature, printed name, date, and social security number. It’s a formality, but it’s an important step to take before turning in your completed form.

Documents to gather ahead of time

Because SBA Form 413 requires so much financial information, it’s important to have the relevant documentation prepared to expedite the process. See below for some of the most common documentation required:

Personal checking and savings bank statements

Personal checking and saving account statements can give the SBA a solid sense of how much you’re spending and earning.

Retirement account statements

Statements from your IRA accounts reinforce the asset amounts you included on your form.

Life insurance policy documents

A life insurance policy document details the policyholder, benefits, terms and conditions, and monthly payments. This information is important for several parts of SBA Form 413.

Documents concerning your stocks and bonds

These documents show the status of your personal investments, the company whose bonds or stocks you own, and their value. They confirm your form 413 stocks and bonds information.

Pay stubs showing your annual salary

Your annual income is a major factor in determining whether or not you’re eligible for an SBA loan. It helps the lender ascertain whether you can feasibly repay the debt with the loan term.

Documents showing any additional income information

You may have multiple streams of. Having all your income information organized and in one place helps document it accurately and efficiently. It also helps the SBA verify the information.

General market data about your personally owned property

It’s rare for someone to know the market values of their homes, cars, and other properties off the top of their head. Having documentation or prior research available can make Form 413 easier to complete and gives the SBA the verification materials it needs.

Documentation of any held debts

Credit cards, mortgages, and other personal debts are part of your overall net worth. The end total helps determine your eligibility for SBA loans.

Who needs to fill out SBA Form 413?

Unfortunately, you aren’t the only person who needs to fill out SBA Form 413 when applying for an SBA loan. The following people must also do so:

  • Each proprietor
  • Each limited partner with 20% or more interest in your company
  • Each general partner
  • Each stockholder who owns 20% or more of your voting stock
  • Any guarantors or co-signers who are or will be attached to your loan

Get help with SBA Form 413 from SmartBiz

SBA loans are so sought-after that there are generally always hoops to jump through to apply. SBA Form 413 is just one of those hoops, and SmartBiz® can help you get through that and all the other hurdles accurately and efficiently. Check now to see if you pre-qualify* for SBA loans, bank term loans, and other custom options. If you do, SmartBiz will help you out at every step of the way – paperwork included.

*We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and happens after your application is in the funding process and matched with a lender who is likely to fund your loan.

WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.

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