The Small Business Administration (SBA) loan application has a fair amount of paperwork. One requirement is SBA Form 413, which is a personal financial statement. Prepare yourself for this part of the loan process by learning what information you’ll need before filling out the form.
Key Points
• Form 413 serves as a personal financial statement, helping lenders evaluate loan applications based on repayment ability and the creditworthiness of applicants.
• Applicants seeking 7(a) loans, 504 loans, disaster loans, surety bond guarantees, or woman-owned certifications must complete this required documentation.
• Separate forms must be submitted for each proprietor, general partner, managing LLC member, owner with 20% or more equity, and loan guarantor.
• Completing the form requires gathering current financial statements showing all personal assets, liabilities, stocks, bonds, real estate holdings, and life insurance policy details.
• Applicants must sign and certify the form’s accuracy under penalty of criminal prosecution while providing their Social Security Number for verification purposes.
Why the SBA Requires a Personal Financial Statement
The SBA is an independent U.S. government agency established to support, counsel, and protect the interests of small businesses. The SBA does not lend money directly, but guarantees loans made by partners (banks/lenders), reducing risk for lenders and helping small businesses secure funding
Small Business Administration Form 413 is a personal financial statement that helps lenders evaluate SBA loan applications based on your ability to repay and creditworthiness. Lenders want to know you’re financially stable in your personal life as well as in your business to ensure you’re likely to repay the loan.
Form 413 also indicates whether or not you’re overleveraged with debt outside your business.
Recommended: Small Business Tax Tips
Who Needs to Complete SBA Form 413?
Applicants of certain SBA programs must complete Form 413, including:
• 7(a) loans
• 504 loans
• Disaster loans
• Surety bond guarantees
• Woman-owned small business certification
• 8(a) business development program
For 7(a) loans, 504 loans, surety bonds, and disaster loans, you’ll need to fill out a separate form for each of the following parties:
• Each proprietor or general partner
• Each managing member of an LLC
• Each owner of 20% or more of the equity of the applicant (including the owner’s spouse’s or minor children’s assets)
• Anyone guaranteeing the loan
When applying for the Women Owned Small Business Federal Contracting Program or the Business Development Program, you’ll need a separate personal financial statement for your spouse, unless you’re legally separated.
Recommended: Startup Business Loans
What You’ll Need Before You Start
Filling out Form 413 for the SBA involves listing all of your personal assets and liabilities. You’ll need the most up-to-date account and debt balances, so start by gathering recent bank and investment account statements, pay stubs, life insurance statements, and loan statements.
You don’t have to submit copies of these documents with the SBA 413 form, but you’ll need the information from those statements. Remember that this form only applies to your personal finances, so at this point, you won’t need any documents related to your business income and taxes.
Recommended: Business Checking
How to Fill Out SBA Form 413 (Line by Line)
There are eight distinct sections of the SBA Form 413, plus an overview section for your assets and liabilities. Here’s what you’ll need to complete each part of the form.
Section 1: Source of income
This section requests your salary, as well as a few other types of income. Net investment income includes interest, dividends, capital gains, rental and royalty income, and non-qualified annuities. Real estate income includes any rental payments you receive (with expenses deducted).
Section 1 of the SBA Form 413 also leaves space for you to describe other income not included above. For instance, you can include alimony or child support payments if you want it to count towards your income.
Finally, this section allows for contingent liabilities, such as legal claims, judgments, or federal income tax provisions.
Section 2: Notes Payable and Debts
In section 2, you’ll list out your debts. You’ll need these details for each one:
• Name and address of noteholder
• Original balance
• Current balance
• Payment amount
• Frequency of payments
• Types of collateral
Recommended: Small Business Credit Card
Section 3: Stocks and Bonds
Next, you must disclose your personal portfolio of stocks and bonds, including this information:
• Number of shares
• Name of securities
• Cost
• Market value quotation
• Date of quotation
• Total value
Section 4: Real Estate Owned
The next set of assets to include is any real estate you own. Each property must be listed separately and should include:
• Type of real estate, such as your primary residence, other residence, or rental property
• Address
• Date you purchased the property
• Original cost
• Current market value
• Name and address of the mortgage holder
• Mortgage account number
• Mortgage balance
• Payment amount
• Mortgage status
Section 5: Other Personal Property and Assets
This section is open-ended and allows you to describe any other property or assets you own. If it’s a financed asset, you also need to include the following details:
• Name and address of lien holder
• Lien amount
• Payment terms
• Any delinquencies
Section 6: Unpaid Taxes
Here you’ll describe any unpaid taxes. The SBA requests that you include the type of lien, who it’s payable to, when it’s due, how much is owed, and if any properties are attached to the tax lien.
Recommended: Small Business Tax Deductions
Section 7: Other Liabilities
If you have any liabilities that don’t fit into the sections above, list them in section 7. This could include things like lawsuits or private agreements, but most people won’t have anything to include here.
Section 8: Life Insurance Held
This final section requires the details of any life insurance policies you hold. Be prepared to provide:
• Face amount
• Cash surrender value
• Name of insurance company
• Names of beneficiaries
Final Section: Signature and Certification
After completing all eight sections, you must sign the form and certify its accuracy under penalty of criminal prosecution. You also must include your Social Security Number. You’ll also see several penalty disclosures for each program that you should read before submitting SBA Form 413.
How to Calculate Net Worth on SBA Form 413
Before you go into details on your income, debt, stock holdings, and property, you’ll fill out an overview of your assets and liabilities. Total each column, then subtract your liabilities from your assets to enter your net worth.
Common Mistakes to Avoid
There is a lot of information required on SBA Form 413, so you need to pay careful attention to make sure everything you enter is accurate. The most common mistakes to watch for include listing inaccurate financial information and leaving off assets or liabilities. Make sure you’re as comprehensive as possible and use the most recent account statements when filling out your form.
Another common error? Mismatched income between your form and your tax returns. Be sure you’ve included all of your income sources, or you could trigger a warning in your application.
What Happens After You Submit SBA Form 413
The SBA 413 form is part of the broader SBA loan application. You don’t need it for a business line of credit or equipment financing with private lenders, only SBA loans. Once your application is submitted, you’ll have to wait as long as a few months to receive a decision. Turnaround time is usually faster if you work with an SBA preferred lender.
The Takeaway
Completing the SBA Form 413 is a crucial part of the loan process. Take your time and make sure you gather your most recent financial information. With a complete personal statement submitted, lenders can do a better job underwriting your loan.
If you want to explore all types of small business loans, check out SoFi’s marketplace.
If you’re seeking financing for your business, SoFi is here to support you. On SoFi’s marketplace, you can shop and compare financing options for your business in minutes.
FAQ
What is SBA Form 413 used for?
SBA Form 413 is used by lenders to assess your personal financial health. It shows your assets and liabilities outside your business and is part of your loan’s overall risk assessment.
Who has to fill out SBA Form 413?
Most SBA loan applicants must fill out SBA Form 413. Any partial owner or partner of the business must fill out a separate form, as does the spouse of an applicant for the Women Owned Small Business Federal Contracting Program and the Business Development Program.
What documents do I need for the SBA personal financial statement?
While you don’t need to submit documentation with your SBA personal financial statement, you will need recent financial statements to input accurate information. At a minimum, this usually includes bank statements, loan statements, and investment account statements.
How do I value assets on SBA Form 413?
Assets are valued based on your most recent statements. At the beginning of the form, you’ll give an “as of” date, which must be within 90 to 120 days of submitting your application, depending on the type of SBA program you’re applying for.
What happens if I make a mistake on SBA Form 413?
Making a mistake on Form 413 could cause delays in getting approved or could even cause your application to be denied. If you notice a mistake, reach out to your lender right away.
Photo credit: iStock/fotostorm
SoFi's marketplace is owned and operated by SoFi Lending Corp.
Advertising Disclosures: The preliminary options presented on this site are from lenders and providers that pay SoFi compensation for marketing their products and services. This affects whether a product or service is presented on this site. SoFi does not include all products and services in the market. All rates, terms, and conditions vary by provider. See SoFi Lending Corp. licensing information below.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
SOSMB-Q425-099