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PERSONAL FINANCIAL STATEMENT
I am new to the commercial loan origination industry. My wholesale commercial lenders are asking to prepare personal financial statement of each commercial loan applicant. How do you complete a complete financial statement?
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This discussion was modified 2 months, 3 weeks ago by
Bailey.
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This discussion was modified 2 months, 3 weeks ago by
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3 Replies
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These instructions provide a stepwise procedure for completing a Personal Financial Statement (PFS) for a person applying for a commercial loan.
Obtain Financial Details: Some of the financial information that would be sourced include assets available either in cash, investments, or real estate, as well as financial liabilities such as loans, mortgages, credit card debts, and payment sources.
Fill Out the Form: The information should be filled in the PFS form, which the lender most likely provided. This form would detail the personal information of the current borrowers, net worth (liabilities are deducted from total assets), and income and expenditures.
Ensure the Information is Accurate: The correctness of all the data entered should be verified.
Provide Supporting Evidence: With the statements, attach returns, bank accounts, and evaluations of assets wherever applicable.
This form enables the lenders to evaluate solvency and the probability of default by the loan applicant.
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This does not tell me anything. If I did not have a PFS form and had to type one up, can you please explain in detail the line items on how to prepare a personal financial statement from scratch? I really appreciate it if you can show me step by step on the type of information I need to put on a professional custom personal financial statement.
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Mostly! Following are some simple steps for filling out the Personal Financial Statement PFS form:
Part I- Personal Information:
- Name: Write the full legal name.
- Address: State a present address.
- Phone Number and Attention Email: Enter contacts.
- Occupation: Summarize occupation.
- Work Experience: Provide details on how long and where the applicant has been working, including the job title, Company(their employer), and Department(the Individual was working in).
Part II- Assets:
- Cash and Accounts: Give an overview of the balance of the existing cash and savings accounts.
- Securities: Here, outline shares, pension plans, and insurance purchases.
- Properties: As for properties, list all held ones and their present worth.
- Mobility: Include a list of the subjects such as others, maker, model year, and present value.
- Assets of Value Any Other Value-Valuable personal property such as but not limited to (collections, cars, plaques, gold, silver, stocks and bonds, motorbikes, and binoculars.).
Part III- Liabilities:
- Mortgages: At these stages of life, debts on the property, including the first and other mortgages, are still standing. Checklist deeds have been moved.
- Loans: Consider including debt consolidating loans, motor vehicle loans, and, or signature loans.
- Credit Card Debt: Another challenge faced by these people in their daily accounting activity should be tracked. This is mainly the entire amount that is left to be repaid to these companies.
- Other Liabilities: Note the other forms of obligation to other people, such as school loans and debts.
Part IV- Calculation of Net Worth:
- Total Assets: This includes all assets.
- Total Liability: This details all liabilities.
- Net Worth: This is simple; just owed liabilities are removed from total assets.
Part V- Income:
- Salary/Wages: Such is the gross salary attained as an employee of the company.
- Investment income: Earnings listened either by way of dividends or interest earned or any return on investment noted.
- Real estate Income: Mention rental revenue derived from the estates held.
- Other income: Pensions or annuities, or other sources not previously mentioned.
Part VI- Expenses:
- Mortgage Payments: Individual payments are supposed to be made for the loans offered by banks or other financial institutions.
- Loan Payments are the monthly payments made toward an obligation that is sometimes referred to as a loan.
- Living Expenses: This monthly distribution is meant for household use when making expenses.
- Insurance: Money incurred on health insurance, car insurance, or home insurance.
- Other Expenses: This applies in cases where other normal expenses do occur.
Signature and date: Sign and date the document to certify that all self-represented information is truthful and accurate.
Attachments:
- Additional documents, such as bank or investment account statements, appraisals of owned real estate, and any other relevant material, should be provided.
This custom PFS, as will be shown in the succeeding paragraphs, will enable the lender to get an overall assessment of the borrower’s financial state, thus allowing him to determine whether or not the borrower is suitable for a commercial loan.