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SBA loans are small business loans partially guaranteed by the government. These loans often have more favorable rates and longer repayment terms than other business financing options and are offered by financial institutions, including banks, credit unions and online lenders.
But, these loans come with a lengthy approval process and strict documentation requirements. One of these documents is the SBA Form 413, and we will walk you through the steps you need to take to fill out this form below.
- Completing SBA Form 413 is a required step for most SBA loans.
- The SBA uses this form to assess an applicant’s creditworthiness, as well as their ability to repay the loan if approved.
- You can download SBA Form 413 from the Small Business Administration’s website.
What is SBA Form 413?
SBA Form 413, formally referred to as “Personal Finance Statement,” is a form business owners must fill out for most SBA loans. The U.S. Small Business Administration uses this form to assess loan applicants’ creditworthiness and repayment ability. The form requires you to provide a snapshot of your unique financial situation by sharing information about your assets, liabilities and income streams.
Who needs to complete SBA Form 413?
You’ll need to complete SBA Form 413 if you’re applying for a 7(a) loan, 504 loan or surety bond. If you’re applying for a business disaster loan, you must complete this form unless your business is structured as a sole proprietorship.
The following types of applicants are required to complete SBA Form 413:
- All proprietors
- Each general partner
- All owners with a 20 percent or higher stake in the company
- Each managing member of an LLC
- Any person guaranteeing the loan
SBA loan approval rates vary by state. The state with the highest SBA (7a) loan approval rate in California — as of June 15, 2023, 4,041 applicants in California have received approval. On the other hand, North Dakota has the lowest approval rate and is one of the least populated states in the U.S.
How to fill out SBA Form 413
If you’re ready to fill out SBA Form 413, follow the steps below.
1. Gather required documents
Before you begin filling out SBA Form 413, gather documents that contain the information needed to complete it, such as:
- Retirement account statements
- Bank statements
- Investment statements
- Life insurance policies
- Loan statements
- Pay stubs that show your annual income
Important: The documents you provide must be current: within 90 days for loans and 30 days for the 8(a) program.
2. Select the SBA loan type or program
After you’ve gathered the required documents, select the SBA loan type or program you’re applying for on the first page of SBA Form 413.
Here are the options you can choose from:
- 7(a) loan, 504 loan or surety bonds
- Disaster business loan
- Woman Owned Small Business (WOSB) federal contracting program
- 8(a) Business Development Program
The SBA weekly lending report shows a summary of loan approvals 7(a) and 504 loans broken down into different demographics, such as race, veteran status, industry and gender.
3. Enter business and personal information
At the top of page two of the form, provide your name, business name, home address, business and home phone number. Also, check what type of business entity you have:
Afterward, select whether you’re married if you’re applying for the WOSB program.
4. Add your assets and their value
For this section, you’ll need to list all of your assets — items of value, such as a bank account or cash. You’ll also need to provide the value of your spouse’s assets if married.
Below are some additional assets you’re required to list:
- Retirement accounts. List the value of your retirement accounts, such as Roth IRAs, Traditional Roths, 401(k)s and 403(b)s. If married, include the total value of your spouses’ accounts as well.
- Accounts and notes receivable. If you have unpaid invoices, list the value here.
- Life insurance — cash surrender value only. If your life insurance policy includes a cash value component, you’ll have to list the current payout amount you’d receive after cancelling your policy. This option comes with whole life insurance policies. Term life policies — policies with a set expiration period — don’t include a cash value option.
- Stocks and bonds. Write down the current market value of any stocks and bonds you and your spouse have purchased. You’ll provide additional details in section three.
- Real estate. Provide the total current market value of all the real estate you and your spouse own, including primary residences, rental properties and commercial property. You’ll share more details in section four.
- Automobiles. List the current market value of automobiles you and your spouse own. Don’t include any leased vehicles — they aren’t considered assets.
- Other personal property. Include the approximate value of your personal stuff, such as an engagement ring, furniture and electronics.
- Other assets. Provide an estimated value for any asset not listed above.
5. Add your liabilities and their value
This section requires you to list your liabilities. If married, you’ll also list any joint liabilities you have with your spouse.
Liabilities you’ll provide information for include:
- Accounts and notes payable. If you’ve personally loaned money to a third money, list the outstanding amount.
- Automobile installment accounts. Provide monthly payments and total outstanding balance for any vehicles you lease or finance.
- Other installment accounts.
- Loans against life insurance. If you’ve taken out a loan using your life insurance policy as collateral, include the total amount you borrowed.
- Mortgages on real estate.
- Unpaid taxes. Write down any taxes you owe since filing your most recent tax return.
- Other liabilities. List the total outstanding balance on any other debts not listed above. You’ll provide more details in section seven.
Once you’ve finished listing your liabilities, add them up. Afterward, calculate your net worth by subtracting your total liabilities from your total assets.
6. List income and any contingent liabilities
In section 1, you’ll need to list your sources of income, including:
- Salary. List your annual salary on your tax return and your spouse’s annual salary if married.
- Net investment income. Provide the total amount you earn from interest or dividends on your investments.
- Real estate income. List the amount you earn from real estate minus expenses.
- Other income. Enter any other income not listed above.
You may also need to list contingent liabilities if you meet certain requirements:
- As endorser or co-maker. Enter any debts in which you are your spouse are co-signers.
- Legal claims and judgments. Provide the outstanding amount of any pending litigation.
- Provision for federal income tax. List the estimated amount your business will have to set aside to cover federal taxes for the current year.
- Other special debt. Share any other debt you didn’t list above.
7. Add any additional details
Once you’ve filled out section one, complete sections two through eight — these sections require you to list additional information about the assets and liabilities you listed earlier.
- Section 2: List details of any debts you owe to banks or other lenders.
- Section 3: Share more information about stocks and bonds you own.
- Section 4: Provide more details about any real estate you own.
- Section 5: Add additional details about any other personal property and other assets you listed.
- Section 6: Provide details about any unpaid taxes.
- Section 7: Enter more details about any liabilities you listed in the other liabilities section.
- Section 8: Share details about any life insurance policy you included.
8. Review the form, sign and date
Double-check the information you provided on the form to ensure accuracy since mistakes may lead to an SBA loan denial. If you need help reviewing the form, consider contacting an accountant or loan specialist. Once finished, you’ll sign, date and provide your Social Security number.
The bottom line
SBA loans often come with lower rates and more flexible repayment terms than conventional business loans. But getting one is typically a lengthy process. Although gathering the necessary documents to fill out SBA Form 413 can be tedious, doing so may help you qualify for one of the best small business financing options.
Frequently asked questions about SBA Form 413
When applicants apply for the majority of SBA loans, they’re required to complete SBA Form 413. The SBA uses this form to assess an applicant’s creditworthiness and ability to repay loans as promised.
When filling out SBA Form 413, you must calculate your net worth on page two. To do this, subtract your total assets from your total liabilities.
SBA Form 413 requires applicants to share personal information like their name, business name and business types. In addition, you have to provide information about your finances, including bank statements, investment statements, loan statements and sources of income.