Glossary · Reading the business
historical financial statements
In short
Past financial records of the business, including Profit & Loss Statements and Balance Sheets, typically for the last three years. These are essential to understand the business's performance trends.
What it means in a deal
Lenders use these statements, along with tax returns, to verify revenue, expenses, and profitability. You'll scrutinize them during due diligence to identify trends, inconsistencies, and "add-backs" that reveal the true owner earnings. This forms the foundation for your business valuation and cash flow projections.
Related terms
Common questions about historical financial statements
- Do I need to provide personal financial statements for an SBA 7(a) loan?
- What types of personal financial statements are required for an SBA 7(a) loan?
- What types of personal financial statements are typically required for an SBA 7(a) loan application?
- Can unverified or inconsistent financial statements from the seller cause my SBA loan to be denied?
- What kind of financial statements does the SBA 7(a) loan application require from my business?
- What specific due diligence does the lender perform on the target business's financial statements for an acquisition?
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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