Draft Your Personal Financial Statement

You can skip the rest of this chapter unless you are seeking a loan or investors for your business. Your personal financial statement will list your personal assets, liabilities, income, and expenses. It tells your backers a lot about your ability to handle money. Don’t be discouraged if your financial condition is weak. Your backers want to know about you, the good and the bad, and they understand that you need money.

Preparing this statement in a form lenders are used to seeing involves several steps, which this chapter will take you through step by step. As you’ll see, the task is not much harder than filling out a credit application. Drawing up a good personal financial statement isn’t difficult, but it does involve attention to detail. I recommend that you do a rough draft first.

If you already own or have an interest in an existing business, you may wish to include a separate statement of the business’s net worth or balance sheet and profit and loss statement. If you own all or a portion of a business and don’t plan to submit a separate statement on the business, include your share of the business on this personal financial statement.

Tip Co-owned property note: If you own an item with others and the other owners will not sign for the loan, enter only the value of your share of the assets and corresponding liability. If all parties will sign for the loan, enter the full amount. Describe the ownership type (joint tenancy, community property, tenants in common, partnership, or separate property).


If you’re not sure how you own property, look at the deed or other title document. Determine Your Assets Your task is to briefly describe and estimate the current value of everything you own, even if you owe money against it. If you’re not sure how much a particular item is worth, make an estimate now and verify it later. Give the market value— the price for which you could sell the particular piece of property today.

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