As you fill out your Business Financial History (loan application), it should become immediately apparent why this is the last financial document to be completed. All of the information needed will have been compiled previously in earlier parts of your plan and in the financial statements you have already completed.
To help you with your financial history, the following is a list of information most frequently required. Also listed are the some of the sources you can refer to for that information:
1. Assets, Liabilities, Net Worth: You should recognize these three as balance sheet terms. You have already completed the Balance Sheet for your company and need only to go back to that record and bring the dollar amounts forward.
2. Contingent Liabilities: These are debts you may come to owe in the future (for example: default on a cosigned note or settlement of a pending lawsuit).
3. Inventory Details: Information is derived from your Inventory Record. Also, in the Organizational Plan you should already have a summary of your current policies and methods of evaluation.
4. Profit & Loss Statement: This is revenue and expense information.
You will transfer the information from your Annual Profit & Loss (last statement completed) or from compilation of several if required by the lender.
5. Real Estate Holdings, Stocks and Bonds: Refer back to your Organizational Plan. You may also have to go through your investment records for more comprehensive information
6. Legal Structure Information (Sole Proprietorship, Partnership or Corporation): There are generally three separate schedules on the financial history, one for each form of legal structure. You will be required to fill out the one that is appropriate to your business. In the Organizational section, you will have covered two areas that will serve as the source of this information—Legal Structure and Management.
Supporting Documents may also contain some of the information that you will need.
7. Audit Information: Refer back to the Organizational Plan under Accounting & Legal. You may also be asked questions about other prospective lenders, whether you are seeking credit, who audits your books, and when they were last audited.
8. Insurance Coverage: You will be asked to provide detailed information on the types of insurance your company has (i.e., liability, earthquake, workers compensation, inventory, machinery and fixtures, buildings, extended coverage, etc.). Your Organizational Plan and Insurance Update worksheet should have all of the information you will need to fill in this section of the financial history.
Business Financial History Form
You will find an example of a Business Financial History that might be required by a potential lender or investor on the next two pages (104-105).
Personal Financial Statement Form
If you are a new business and need your Personal Financial Statement for this section, you will find a sample form in “Anatomy of a Business Plan”, Chapter 7, "Supporting Documents".
Please Note: Part IV: Financial Statement Analysis will follow after the Business Financial History example. (See pages 106-112)
Analysis of your financial statements will help you to make decisions and implement changes that will make your business more profitable.
INDIVIDUAL, PARTNERSHIP, OR CORPORATION
FINANCIAL STATEMENT OF Received At________________________________________________Branch
Name__________________________________________________________________ Business________________________________________________________
Address________________________________________________________________ At Close of Business________________________________________20_____
To The undersigned, for the purpose of procuring and establishing credit from time to time with you and to induce you to permit the undersigned to become indebted to you on notes, endorsements, guarantees, overdrafts or otherwise, furnishes the following (or in lieu thereof the attached, which is the most recent statement prepared by or for the undersigned) as being a full, true and correct statement of the financial condition of the undersigned on the date indicated, and agrees to notify you immediately of the extent and character of any material changes in said financial condition, and also agrees that if the undersigned or any endorser or guarantor of any of the obligations of the undersigned, at any time fails in business or becomes insolvent, or commits an act of bankruptcy, or if any deposit account of the undersigned with you, or any other property of the undersigned held by you, be attempted to be obtained or held by writ of execution, garnishment, attachment or other legal process, or if any of the representations made below prove to be untrue, or if the undersigned fails to notify you of any material change, as above agreed, or if the business, or any interest therein of the undersigned is sold, then and in such case, at your option, all of the obligations of the undersigned to you, or held by you, shall immediately become due and payable, without demand or notice. This statement shall be construed by you to be a continuing statement of the condition of the undersigned, and a new and original statement of all assets and liabilities upon each and every transaction in and by which the undersigned hereafter becomes indebted to you, until the undersigned advises in writing to the contrary.
ASSETS DOLLARS CENTS LIABILITIES DOLLARS CENTS Cash In____________________________________________________________________________ Notes Payable to Banks___________________________________________________________
(Name of Bank)
Cash on Hand_______________________________________________________________________ Notes Payable and Trade Acceptances for Merchandise__________________________________
Notes Receivable and
Trade Acceptance (Includes $_________________________Past Due)________________________ Notes Payable to Others __________________________________________________________
Accounts Receivable--$________________Less Reserves $_____________ Accounts Payable (Includes $____________________ Past Due)__________________________
Due to Partners, Employees
Customer’s . . . (Includes $___________________________Past Due) _______________________ Relatives, Officers, Stockholders or Allied Companies________________________________
Chattel Mortgages and Contracts Payable (Describe
Merchandise—Finished—How Valued ___________________________________________________ Monthly Payments) . . . . . $_________++______________________________________
Merchandise—Unfinished—How Valued _________________________________________________ Federal and State Income Tax______________________________________________________
Merchandise—Raw Material—How Valued_______________________________________________ Accrued Liabilities (Interest, Wages, Taxes, Etc.)_______________________________________
Supplies on Hand____________________________________________________________________ Portion of Long Term Debt Due Within One Year______________________________________
Stocks and Bonds—Listed (See Schedule B)______________________________________________________________________________________________________________________________
TOTAL CURRENT ASSETS TOTAL CURRENT LIABILITIES
Real Estate—Less Depreciation of: $___________________________Net_______________________ Liens on Real Estate (See Schedule A) $_____________________________________________
(See Schedule A)
Less Current Portion Included Avove $_____________________Net______________________
Machinery and Fixtures—
Less Depreciation of: $___________________________Net_______________________________________________________________________________________________________
Automobiles and Trucks—
Less Depreciation of: $___________________________Net_______________________ Capital Stock—Preferred__________________________________________________________
Stocks and Bonds—Unlisted (See Schedule B)_____________________________________________ Capital Stock—Common__________________________________________________________
Due from Partners, Employees,
Relatives, Officers, Stockholders or Allied Companies______________________________________ Surplus—Paid In________________________________________________________________
Cash Value Life Insurance _____________________________________________________________ Surplus—Earned and Undivided Profit_______________________________________________
Other Assets (Describe________________________________________________________________ Net Worth (If Not Incorporated)_________________________________________________
TOTAL TOTAL PROFIT AND LOSS STATEMENT
FOR THE PERIOD FROM________________ TO_____________ CONTINGENT LIABILITIES (Not Included Above)
Net Sales (After Returned Sales and Allowances)____________________________________________ As Guarantor or Endorser_________________________________________________________
Accounts, Notes, or Trade
Cost of Sales: _______________________ Acceptance Discounted or Pledged_______________________________________________
Beginning Inventory _______________________ Surety On Bonds or Other Continent Liability__________________________________________
Purchases (or cost of goods mfd.) _______________________ Letters of Credit_________________________________________________________________
TOTAL _______________________ Judgments Unsatisfied or Suits Pending ______________________________________________
Less: Closing Inventory _____________________________________________ Merchandise Commitments and Unfinished Contracts ___________________________________
Gross Profit on Sales ______________________ Merchandise Held On Consignment From Others ______________________________________
Unsatisfied Tax Liens or Notices From the Federal or
Operating Expenses: _______________________ State Governments of Intention to Assess Such Liens________________________________
Salaries—Officers or Partners _______________________ RECONCILEMENT OF NET WORTH OR EARNED SURPLUS Salaries and Wages—Other _______________________ Net Worth or Earned Surplus at Beginning of Period____________________________________
Rent _______________________ Add Net Profit or Deduct Net Loss__________________________________________________
Depreciation _______________________ Total____________________________
Bad Debts _______________________ Other Additions (Describe)________________________________________________________
Advertising _______________________ ________________Total___________________________
Interest _______________________ Less: Withdrawals or Dividends ___________________________
Taxes—Other Than Income _______________________ Other Deductions (Explain) ___________________________
Insurance _______________________ Total Deductions_______________________
Other Expenses _____________________________________________ Net Worth or Capital Funds on This Financial Statement_________________________________
Net Profit from Operations _____________________________________________
DETAIL OF INVENTORY
Other Income _______________________ _______________________________________________________________________________
Less Other Expenses _____________________________________________ Is Inventory Figure Actual or Estimated?_____________________________________________
Net Profit Before Income Tax _____________________ By whom Taken or Estimated______________________________When?__________________
Federal and State Income Tax _____________________ Buy Principally From____________________________________________________________
Net Profit or Loss _____________________________________________ Average Terms of Purchase________________________ Sale___________________________
(To Net Worth or Earned Surplus) _____________________________ _______ Time of Year Inventory Maximum__________________Minimum________________________
INDIVIDUAL, PARTNERSHIP, OR CORPORATION – Page 2
SCHEDULE A LIST OF REAL ESTATE AND IMPROVEMENTS WITH ENCUMBRANCES THEREON
BOOK VALUE MORTGAGES OR LIENS
Description, Street Number, Location Title in Terms of Holder of Lien Names of LAND I MPROVEMENTS MATURITY AMOUNT Payment
____________________________________________________$___________$_________________________$_____________$_______________________________________
________________________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________________________
TOTALS $ $ $ $
SCHEDULE B STOCKS & BONDS: Describe Fully. Use Supplemental Sheet if Necessary. Indicate if Stocks Are Common or Preferred. Give Interest Rate and Maturity of Bonds.
NO. OF SHARES NAME AND ISSUE (DESCRIBE FULLY) BOOK VALUE MARKET VALUE
AMT. OF BONDS LISTED UNLISTED PRICE VALUE
____________________________________________________________________________$____________________$________________________________$_____________
__________________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________________________________________
TOTALS $ $ $ SCHEDULE C Complete if Statement is for an Individual or Sole Proprietorship
Age Number of Years in Present Business ___ Date of Filing Fictitious Trade Style_______________________________________________________________
What Property Listed in This Statement is in Joint Tenancy? ___ Name of Other Party__________________________________________________
What Property Listed in This Statement is Community Property? ___ Name of Other Party__________________________________________________
With What Other Businesses Are You Connected? ___ Have You Filed Homestead?____________________________________________
Do You Deal With or Carry Accounts With Stockbrokers? Amount $ Name of Firm SCHEDULE D Complete if Statement is of a Partnership
NAME OF PARTNERS Age Amount Outside Other Business Connections (indicate special partners) Contributed Net Worth
___________________________________________________________$________________$___________________________________________________________________
________________________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________________________
________________________________________________________________________________________________________________________________________________
Date of Organization ______ Limited or General? Terminates______________________________________________
If Operating Under Fictitious Trade Style, Give Date of Filing SCHEDULE E Complete if Statement is of a Corporation
AUTHORIZED Par OUTSTANDING ISSUED FOR
Value SHARES AMOUNT CASH
Common Stock _________________ $_____________________ $________________ $_______________ $_______________________________________________________
Preferred Stock $ $ $ $
Bonds—Total Issue $____________________ $__________________ $__________ $_______________________________________________________
Date Incorporated Under Laws of State of
Shares Owned Shares Owned
Officers Age COMMON PREFERRED Directors and Principal Stockholders COMMON PREFERRED President________________________________________________________________________________Director____________________________________________________________________
Vice President____________________________________________________________________________Director____________________________________________________________________
Secretary____________________________________________________________________ Director ________________________________________
Treasurer
SCHEDULE F Complete in ALL Cases INSURANCE Are Your Books Audited by
Outside Accountants?______________None______________________________________________ Merchandise______________$_________________ Automobiles and Trucks:
Date of To What Date Has the U.S. Internal
Last Audit_______________________Revenue Department Examined Your Books?______________ Machinery & Fixtures______$__________________ Public Liability $_________M/$________M Are You Borrowing From Any Other
Branch of This Bank?______________Which?_____________________________________________ Buildings________________$_________________ Collision_______________$____________
Are You Applying for Credit
At Any Other Source?______________Where?____________________________________________ Earthquake_______________$_________________ Property Damage________$____________
Have You Ever Failed If So, attach a Complete Explanation and Is Extended Coverage
In Business?_____________________State Basis of Settlement With Creditors___________________ Endorsement Included?_______________________ Life Insurance___________$____________
Do You Carry Workmen’s Name of
Lease Has_______________________Years to Run With Monthly Rental of $___________________ Compensation Insurance?______________________ Beneficiary__________________________
STATEMENT OF BANK OFFICER: The undersigned solemnly declares and certifies that the above statement (or in lieu Insofar as our records reveal, this Financial Statement is accurate and true. The thereof, the attached statement, as the case may be) and supporting schedules, both printed foregoing Statement is (a copy of) the original signed by the maker, in the credit files and written, give a full, true, and correct statement of the financial condition of the under-
as of this Bank. signed as of the date indicated.
Signature_____________________________________________________________________
______________________________________________Assistant Cashier-Manager By__________________________________________________________________________
(Title, If Corporation)