100 | HOW TO WRITE A BUSINESS PLAN
Complete Your Personal
Financial Statement
If you have not already done so, print
out your spreadsheet. Make sure you sign
and date your completed form; you’ll be
surprised at how fast things change.
As noted above, many financial institu-
tions prefer their own form, which they
will supply you. However, chances are
that you won’t have to redo your Personal
Financial Statement or, if you do, it will
be easy.
Verifying the Accuracy of
Your Financial Statement
Potential lenders probably will want to
verify your financial statements. Tax
returns for the last two or three years are
normally adequate to back up your income
and expense statements. If your actual
income is somewhat greater than your tax
returns show, be ready to verify your assets
in some other way. But don’t worry too
much about this sort of disparity unless it
is large. In an age of overly high taxation,
your lender will not be surprised if your
actual income is a shade higher than your
reported income. His probably is, too.
In addition, lenders usually obtain
a personal credit check from a credit
information agency on your track record in
making payments. That shows what bills
you pay and when, as well as any unpaid
bills. Credit reports also list your current
employment, lawsuits in which you’re
involved, and bankruptcies filed in the
last ten years. It’s a good idea to request
your own copy of your credit report before
you meet with any prospective lenders.
That way, you’ll know what they will
see and will be prepared to discuss it. If
your credit file contains some inaccurate
or misleading information, you have the
right to challenge that information. (For
information on how to go about this, see
Solve Your Money Troubles: Debt, Credit &
Bankruptcy, by Robin Leonard (Nolo).)
Most of the time, lenders will accept
your estimates of your personal assets
and liabilities on your Personal Financial
Statement, since it is a crime to knowingly
make false financial statements.
Banks will also verify your cash deposits
by contacting the relevant institutions. Also,
lenders will want evidence of your title to
property they take as security for a loan. (^) ●