Glossary · Reading the business
Business Financial Statement
In short
Formal records summarizing a business's financial activities and position. These include the Profit & Loss Statement, Balance Sheet, and Cash Flow Statement, which are crucial for due diligence.
What it means in a deal
You'll spend significant time reviewing the business financial statements during due diligence. Lenders rely on these to assess the business's health and repayment capacity. Scrutinize them for accuracy, consistency, and potential add-backs to understand the true owner earnings.
Related terms
Common questions about Business Financial Statement
- What if my personal financial statement shows low liquid assets?
- How important is my personal financial statement for an SBA 7(a) loan application?
- What if my personal financial statement shows low liquidity, but I have a strong credit score and business plan?
- What happens if my personal financial statement shows low liquidity, but I have a strong credit score and business plan?
- What is a 'personal financial statement' and why is it needed for an SBA 7(a) loan?
- What does a 'personal financial statement' entail and why is it needed for an SBA 7(a) loan?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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