Glossary · Reading the business
Financial Statement
In short
These are formal records of a business's financial activities, like Profit & Loss statements and Balance Sheets. They show you the historical performance and health of the business.
What it means in a deal
Lenders rely heavily on these to assess the business's repayment capacity. You'll need to scrutinize multiple years of these during due diligence, often with your accountant, to verify the business's true profitability and assets.
Related terms
Common questions about 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 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?
- When is a personal financial statement (SBA Form 413) required for non-owner guarantors of a 7(a) loan?
- What if my personal financial statement shows low liquidity, but I have a strong credit score and business plan?
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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