Personal Financial Statement (PFS) for a Loan Guarantor
A guarantor's personal balance sheet -- assets, liabilities, and resulting net worth and liquidity -- one of the four standard document groups (borrower/guarantor information) in nearly every commercial loan submission package.
When to use this
Loan originators send this to every individual guarantor at application, and underwriters review it to confirm the guarantor's net worth and liquidity actually support the loan being requested -- most lenders set a minimum net worth (often equal to or some multiple of the loan amount) and a minimum post-closing liquidity (often 6-12 months of debt service) as underwriting conditions, not just a box-checking exercise. Listing real estate owned here should tie out exactly to the guarantor's separate Schedule of Real Estate Owned rather than being re-summarized differently in two places, since a lender who spots a mismatch between the two documents will question the reliability of everything else in the file. Liabilities should be stated at their current outstanding balance, not the original loan amount, since a guarantor who lists an original balance on a mortgage they have been paying down for years overstates their own leverage and understates net worth -- the opposite of the usual temptation to inflate net worth, so lenders watch for it going the wrong direction too, treating an obviously outdated liability balance as a sign the PFS was assembled carelessly rather than updated for the submission.
PERSONAL FINANCIAL STATEMENT ======================================== As of: [DATE] Name: [GUARANTOR NAME] Address: [GUARANTOR ADDRESS] Relationship to Borrower: [E.G., MANAGING MEMBER, 25% OWNER] ------------------------------------------------------------ ASSETS ------------------------------------------------------------ Cash and Cash Equivalents (checking, savings, money market) $[CASH] Marketable Securities (stocks, bonds, mutual funds) $[SECURITIES] Retirement Accounts (401(k), IRA -- state vested/liquid value) $[RETIREMENT] Real Estate Owned (see attached Schedule of Real Estate Owned) $[REAL ESTATE VALUE] Business Interests (ownership stakes, at estimated value) $[BUSINESS INTERESTS] Automobiles and Other Personal Property $[PERSONAL PROPERTY] Other Assets ([DESCRIBE]) $[OTHER ASSETS] ------------------------------------------------------------------ TOTAL ASSETS $[TOTAL ASSETS] ------------------------------------------------------------ LIABILITIES ------------------------------------------------------------ Mortgages Payable on Real Estate Owned (current balances, see attached Schedule of Real Estate Owned) $[MORTGAGES PAYABLE] Notes Payable to Banks / Other Lenders (current balances) $[NOTES PAYABLE] Credit Card and Other Revolving Debt (current balances) $[REVOLVING DEBT] Other Guaranties Outstanding (contingent liability, at guarantor's pro-rata share of the guaranteed loan balance) $[OTHER GUARANTIES] Other Liabilities ([DESCRIBE]) $[OTHER LIABILITIES] ------------------------------------------------------------------ TOTAL LIABILITIES $[TOTAL LIABILITIES] ------------------------------------------------------------ NET WORTH & LIQUIDITY ------------------------------------------------------------ NET WORTH (Total Assets - Total Liabilities) $[NET WORTH] LIQUID ASSETS (Cash + Marketable Securities) $[LIQUID ASSETS] ------------------------------------------------------------ CONTINGENT LIABILITIES (not included in Total Liabilities above) ------------------------------------------------------------ Are you a guarantor, co-signer, or endorser on any other obligation not listed above? [YES/NO -- IF YES, DESCRIBE] Are there any pending lawsuits, judgments, or tax liens against you? [YES/NO -- IF YES, DESCRIBE] ------------------------------------------------------------ CERTIFICATION ------------------------------------------------------------ I certify that the information provided above is true and accurate as of the date stated, and I understand it will be relied upon by the lender in evaluating this loan. Signature: ___________________________ Date: [DATE]