Financial Statements for a Business Loan: How to Prepare

To prepare financial statements for a business loan, start by getting your books current and reconciled. Then gather what a bank guide to SBA loans lists: a profit and loss statement, a balance sheet, recent tax returns, a debt schedule and a personal financial statement. Every lender sets its own list, so confirm it first.

By Jake McKenna, FounderPublished Last reviewed

This is general information, not tax or investment advice.

What financial statements for a business loan do lenders ask for?

According to a bank guide to SBA loan applications, lenders want personal and business tax returns for the past two to three years, plus current personal and business financial statements. The same guide says business statements usually include balance sheets, income statements and account aging reports. A debt schedule is needed if the business already has credit, and a business plan is expected.

Here is the list in plain English.

Document What it shows Where it comes from
Profit and loss statement Revenue, costs and profit over a period Your books
Balance sheet What the business owns and owes on one date Your books
Accounts receivable and payable aging Who owes you and who you owe, and how late Your books
Debt schedule Existing loans, balances and payments Your lender statements
Tax returns What was filed with the tax authorities Your tax professional
Personal financial statement An owner's own assets and debts The owner
Business plan and projections Where the business is going Owner, often with finance support

Our guide to reading a profit and loss statement and guide to reading a balance sheet explain the first two.

Can you get a business loan with no financials?

It depends on the lender and the loan. The SBA says the contents of a loan application vary with the size of the loan and the lender's processing method, and that your lender tells you which documents you need. So the paperwork can differ between loans.

A lender needs numbers to look at. If the books are behind, a lender is likely to ask for numbers you cannot yet produce. That is why the work below matters whichever loan you pick.

How do you get your books ready first?

Work through these steps in order.

  1. Bring bookkeeping up to date. Every month needs transactions categorized and bank and card accounts matched to statements. If you are behind, catch-up bookkeeping is the way back to a clean starting point.
  2. Reconcile every account. A balance sheet only means something if the bank balance in the books equals the bank balance on the statement. See how to reconcile bank accounts.
  3. Close the month. A bank guide says to expect current statements. A routine month-end close produces monthly statements.
  4. Check the basis. Know whether your books run on a cash or accrual basis, because your statements and your tax return may differ. See cash vs accrual accounting.
  5. List your debts. Lender, original amount, balance, rate and monthly payment, in one table.
  6. Write down the story behind the numbers. One-off costs, a big customer, a bad month. Explain it in writing so the lender does not have to guess.
  7. Build a forecast. A bank guide lists a business plan with financial projections. Our cash flow forecast template is a starting point.

What do you do about tax returns?

Tax returns are usually prepared by a tax professional. English Oak does not prepare tax returns, audit or give investment advice. We work alongside the tax professional you already use.

What if you want a loan to buy a business?

The lender will want to understand the business being bought as well as you. Ask which records of the target business it needs and how recent they must be. Sellers sometimes commission an outside review of earnings before a sale; our guide on what a quality of earnings report is explains what that is and what it is not.

When is this not worth doing yourself?

Outside help can make sense if you are behind, if no one has ever checked the balance sheet, or if you cannot explain your own margins. Our financing support is part of the fractional CFO service, which starts from $2,500 a month. Bookkeeping alone starts from $500 a month. Both are custom quotes with one fixed monthly fee; see pricing and what we do.

Need this done for you? See our Fractional CFO & Advisory service, or pricing. English Oak Financial does not prepare tax returns, perform audits or give investment advice. This guide is general information, not tax, legal or investment advice.

Sources

Common questions

What financial statements do I need for a business loan?

A bank guide to SBA loans lists balance sheets, income statements and account aging reports, plus tax returns and a debt schedule. Your lender sets the exact list.

Can I get a business loan with no financial statements?

The SBA says the application contents vary with the loan size and the lender. Ask your lender before you assume. Expect questions about revenue and costs either way.

How recent should my financials be?

It depends on the lender. A guide from a bank says to expect current statements, so confirm with your lender how recent they must be.

Does English Oak prepare tax returns?

No. English Oak does not prepare tax returns, audit or give investment advice.

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