A personal financial statement is a document that summarizes an individual’s (or married couple’s) current financial position and is usually filled out by the individual or couple. This document includes a breakdown of assets, liabilities, and equity (also known as net worth or wealth). This information can be used as a tool to help individuals and/or families track their financial goals and wealth. It is also commonly requested when applying for loans, whether personal or business.

Pro Tip: It’s best to keep personal and business income, expenses and records separate whenever possible. This helps your lender evaluate your business and personal finances independently. If these are currently combined, don’t sweat, just be prepared to be open with your lender on what’s what so you can set things up separately moving forward.

Assets 

• Assets are things you own. This typically includes cash in your personal checking and/or savings accounts, marketable securities (which are any stocks or bonds), retirement accounts, real estate, and vehicles. Other assets can be anything of value that you own. Please only include personal assets and not anything that’s officially owned by the business.

Liabilities

• Liabilities are debts of money owed or other financial obligations. This includes credit card balances, outstanding bills, auto loans, student loans, unpaid taxes, and mortgages owed on owned real estate. This may include personal loans from friends and/or family. If you have an agreement to pay them back with your personal funds, it should be included here. Please only include personal liabilities, not any business debt that the business is responsible for. 

Equity

• Equity is the difference between the value of what you own versus what you owe. Other terms for equity are “net worth” or “wealth”. Your equity is a common factor that is reviewed in the loan decision phase. Don’t worry, it is just one of many factors that we review!

Income

• Income is any money that you earn or take in and can come from wages working, commissions, alimony, child support, dividends or real estate income.

Legal Questions

• These questions are required since any of these items would have an impact on an individual’s or married couple’s financial position.