Financial Education

What Is a Personal Financial Statement?

The complete guide for 2025. Learn why lenders require it, what to include, and how to create one that gets you approved.

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Key Takeaways

  • •A Personal Financial Statement (PFS) summarizes your assets and liabilities to calculate net worth.
  • •Lenders require it for business loans, commercial real estate financing, and SBA loans (Form 413).
  • •You can create one using a template, but automated software is more accurate and saves time.

A personal financial statement (PFS) is a document that summarizes your financial position at a specific point in time. It lists everything you own (assets), everything you owe (liabilities), and calculates your net worth—the difference between the two.

Think of it as a financial snapshot. Banks, lenders, and financial institutions use personal financial statements to evaluate your creditworthiness when you apply for business loans, commercial real estate financing, or SBA-backed lending.

The Core Formula:

Total Assets − Total Liabilities = Net Worth

If you own a $500,000 home with a $300,000 mortgage and have $100,000 in savings, your personal financial statement would show:

  • Assets: $600,000
  • Liabilities: $300,000
  • Net Worth: $300,000

Why Do Lenders Require a Personal Financial Statement?

When you apply for a commercial loan, your business financials tell only part of the story. Lenders want to see your personal financial picture because:

Personal Guarantees

Most commercial loans require the owner to personally guarantee the debt. Lenders need to verify you have assets to back it up.

Financial Discipline

How you manage personal finances signals how you'll manage business debt. A strong PFS shows responsibility.

Loan Compliance

For existing loans, lenders require annual statements to ensure you maintain adequate net worth.

Risk Assessment

It helps underwriters calculate debt-to-income ratios and overall liquidity positions.

What's Included in a Personal Financial Statement?

A complete personal financial statement contains two main sections:

Assets (What You Own)

  • Liquid Assets: Checking, savings, money market, CDs, cash value of life insurance.
  • Investment Assets: Brokerage accounts, retirement (401k, IRA), stocks, bonds, business interests.
  • Real Estate: Primary residence, investment properties, vacation homes, land.
  • Personal Property: Vehicles, jewelry, art, high-value furnishings.
  • Other Assets: Notes receivable, business equipment.

Liabilities (What You Owe)

  • Secured Debt: Mortgages, auto loans, equipment loans.
  • Unsecured Debt: Credit cards, personal loans, student loans, medical debt.
  • Other Liabilities: Unpaid taxes, legal judgments, alimony/child support.
  • Contingent Liabilities: Guarantees on other loans (crucial for business owners).

PFS vs. Net Worth Statement

These terms are often used interchangeably, but there's a distinction:

FeaturePersonal Financial StatementNet Worth Statement
PurposeFormal document for lendersPersonal tracking
Detail LevelComprehensive (includes income)Assets & Liabilities only
FormatStandardized (Bank/SBA)Flexible
SignatureRequired certificationOptional

Types of Templates

SBA Form 413

Official form for all SBA-backed loans. Standardized two-page format.

View Guide

Generic PFS Template

Universal format accepted by most lenders. Covers all standard categories.

Get Template

How to Create Your Statement (Step-by-Step)

1

Gather Financial Info

Collect bank statements, investment accounts, mortgage statements, and property appraisals. Log into each institution to get current balances.

2

List Assets & Liabilities

Enter current market values for real estate and vehicles. List all debts with current principal balances. Don't forget contingent liabilities.

3

Calculate & Review

Subtract liabilities from assets to get Net Worth. Double-check for math errors—this is the #1 reason for loan delays.

The Better Way: Automated Software

Instead of manually logging into 10+ accounts and updating spreadsheets, use StatementsReady. We connect to your banks, update balances daily, and generate professional PDFs instantly.

  • 8-minute setup
  • Bank-grade security
  • Auto-updates daily
  • Lender-approved PDF
Try StatementsReady Free

Personal Financial Statement Example

Here's what a completed statement looks like in practice:

Assets
Cash (Chase)$45,000
Savings (Ally)$125,000
401(k)$380,000
Real Estate$1,075,000
Total Assets$1,625,000
Liabilities
Mortgages$665,000
Auto Loan$22,000
Credit Cards$8,500
Total Liabilities$695,500

Net Worth: $929,500

Frequently Asked Questions

How often do I need to update my PFS?

For existing loans, typically annually (within 90 days of fiscal year-end). For new applications, you need a statement dated within the last 90 days.

Can I use the same statement for multiple lenders?

Yes, but many prefer their own format. Using software makes it easy to export different templates for different banks.

Do I need to include my spouse?

If applying jointly or living in a community property state, yes. Some lenders require spousal info for large loans regardless.

Can I create it myself?

Absolutely. You don't need a CPA. With the right template or software, you can do it yourself in minutes.