Tips for Preparing a Financial Statement for a Lender


  1. Be truthful.     When filling out a financial statement for a lender, you must fully and accurately list all of your ownership interests in property and all of your debts.  If you provide a false financial statement to a lender and the lender extends credit to you based on those material misstatements, the lender may object to your discharge if you later file bankruptcy to discharge the lender’s debt.
  1. Don’t overvalue assets.  A common mistake that people make on financial statements is inflating the value of assets such as their residence, commercial properties, or business interests. To reiterate, if credit is extended to you on the basis of material misstatements regarding the value of your assets, the lender may have a nondischargeability claim against you.  Document the basis of your valuation, i.e. an appraisal or PVA value.
  1. Ask a professional for assistance.   Since financial statements are critical to a lender’s decision to extend credit or enter into forbearance or loan renewal with you, it is advisable to have your CPA or lawyer review the financial statement for accuracy.
  1. Review your loan documents.  Your loan documents may provide that you must provide a quarterly or annual financial statement to the bank as a condition of your loan.  It is important that you understand your reporting requirements to the bank to avoid being in default under the terms of your loan.



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