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AceTheSBA

Get your books into the shape a lender will read them in

By the AceTheSBA team

Sooner or later, a lender will ask for your financial statements. What you do before that request decides whether those statements answer questions or create them.

1. Reconcile every account

Match your books to every bank and card statement through the end of last month. Lenders compare your financial statements with your tax returns and bank statements, and mismatches are one of the most common reasons files stall.

2. Build a debt schedule that matches your balance sheet

List every debt the business owes: lender, original amount, current balance, rate, payment, maturity, collateral and status. Include loans from owners. The total must match the debt on your balance sheet. A mismatch is one of the first things a lender questions.

3. Separate business and personal money

If personal spending runs through the business account, a lender cannot tell what the business really earns. Run everything through a dedicated business account from now on, and give it a few clean months before you apply.

4. Keep debts you plan to refinance current

If the SBA loan will refinance existing debt, the lender needs 12 months of statements showing it is current. A late payment this month shows up in that history for a year.

The lender’s view

Business financial statements must be no more than 120 days old when a lender submits your file. Books that are reconciled every month mean fresh interim statements are quick to produce and easy to trust.

Your move this week

Book one hour this week to reconcile your accounts and list every debt with its current balance. That list is the first draft of your debt schedule.

Read the full guide →

Where do you stand?

The SBA Readiness Report scores your records, including financial statements, tax filings and separation of finances, and gives you a 90-day plan to close the gaps. Know where you stand for $19.99.

This week’s tool

Bookkeeping Cleanup Checklist

Gets your books to reconcile with your bank statements and tax returns.

$15.00