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Applying for a Loan? Make Sure Your Personal Financial Statement is Up to Date to Get Approved!

What is a personal financial statement?

A personal financial statement is a summary of your current financial health, including your assets, income, liabilities, and debts. It’s used to evaluate your overall financial situation and to help with your personal and business needs. It should include four primary elements: assets, liabilities, net worth, and income & expenses. It should also include up-to-date information such as investments, pensions, and any other relevant financial information. Be sure to include an explanation for any discrepancies or inconsistencies in your financial statement if necessary.

Ideally, you should update your personal financial statement on a regular basis – at least once every quarter. This will help ensure that your financial picture remains accurate and up-to-date, giving lenders a more reliable indication of your financial health.

What does a personal financial statement contain?

A personal financial statement contains not just personal finances which usually involve home office finances, but also reflects information about the businesses you may partially or fully own, as well as for multi-business ownership. The personal financial statement is readily needed for cases where you need to apply for a loan. Loans can be for buying a new business location for a multi-entity owner, for a multi-business owner, franchise owner, or multi-location owner. It is also for expanding one specific location if they have to get a loan for operational purposes and such. So for any such type of loan, a personal financial statement is desired.

Multi-entity business owners find the most complications in applying for new loans due to the amount of time and work that’s required to organize their personal financial statement and because of such, their personal financial statements should contain a consolidated view of their monthly income balance sheet, cash flow which contains data about all the businesses that they have as well as about the personal home office financials as well.

The lender will use the personal financial statement to assess the owner’s ability to pay back the loan and their overall financial situation by reviewing income and expenses. Having an accurate and up-to-date personal financial statement can help get an owner approved for a loan with better terms more quickly. It’s important to take the time to review and update the statement regularly to ensure it is accurate and reflects the most current financial situation.

Docyt provides the easy solution for franchise and multi-location owners for these complications through it’s multi-entity consolidation financial reporting. Docyt’s reporting lists out all of the owner’s entities regardless of ownership amount or type of entity, and provides a consolidated view of income statements, balance sheets, and cash flow.

Benefits of having a solution like Docyt for getting a personal finance statement

Docyt Business reports module provides consolidated multi-entity financials that not only facilitate organization, but it also provides a snapshot of your personal balance sheet. You can easily add accounts and transactions in just a few clicks, and the system will automatically keep track of your asset values and liabilities. Plus, it’s always up-to-date with real-time information, so you can be sure that you’re presenting an accurate view of your finances to lenders when you apply for a loan.

A multi-entity report includes two main components: a balance sheet and an income statement. The balance sheet provides an overview of your business’s assets, liabilities, and equity. On the other hand, the income statement provides a snapshot of your business’s profits and losses over a given period of time. Together, these two components give lenders an in-depth look at your business’s financial performance. The Cash Flow statement that Docyt’s report provides is also an invaluable part of ensuring that your personal financial statement is completed.

To get multi-entity reports, get setup with Docyt for each of your entities. Docyt will then bring to life a live consolidated financial view across all entities including basic reports like Income Statement, Balance Sheet and Cash Flow.

Having a comprehensive multi-entity report can make applying for a loan much simpler and more efficient. Not only does it provide lenders with a comprehensive view of your business’s finances, but it also makes it easier to submit the necessary documents when applying for a loan. So if you’re looking to apply for a loan at short notice, make sure you have a multi-entity report ready to go!

If you’d like to learn more about how to better manage your financial statements, visit the Docyt website to schedule a free consultation today.

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Deepali Mantri

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