How to Prepare Financial Statements a Lender Will Accept

Lenders want three core financial documents: a profit and loss statement (P&L), a balance sheet and a debt schedule. Bookkeeping software can produce the first two in minutes if your books are up to date.

1. Profit and loss statement (P&L)

Shows sales minus expenses over a period (the year to date, and prior years).

Line	Example
Sales	$240,000
Cost of goods sold	($96,000)
Gross profit	$144,000
Rent	($30,000)
Payroll	($60,000)
Other operating expenses	($24,000)
Operating profit	$30,000

2. Balance sheet

Shows what the business owns and owes on a specific date.

• Assets: cash, receivables, inventory, equipment, property.
• Liabilities: payables, credit cards, loans, taxes owed.
• Equity: assets minus liabilities.

Assets must equal liabilities plus equity. If they don’t, something is wrong.

3. Debt schedule

A list of every business debt:

Lender	Original amount	Balance	Monthly payment	Rate	Maturity	Collateral

Include cards, equipment loans, vehicle loans, MCAs and loans from owners.

Common mistakes

1. Statements that don’t match tax returns.
2. Personal expenses mixed in.
3. A balance sheet that doesn’t balance.
4. Leaving debts off the schedule (lenders will find them on your credit report).
5. Statements that are months out of date. Lenders often want statements no older than 90 days.

Get help

A bookkeeper or accountant can clean up your books before a loan. SBDC advisors can review them free. See free help in Spanish. Then complete our document checklist.

Frequently asked questions

What financial statements does a lender want?

A profit and loss statement, a balance sheet and a debt schedule, current within about 90 days.

Can I prepare financial statements myself?

Yes, with bookkeeping software, as long as they match your tax returns and bank statements.

What should a debt schedule include?

Every business debt with lender, original amount, balance, payment, rate, maturity and collateral.