Personal financial statement

You are an entrepreneur who has been building your small business for the past two years. Just recently (three months ago), your business turned a monthly profit for the first time. It appears that customer sales will be stable for the next 9-12 months, so you have begun to investigate structuring a deal with a local angel investor to borrow funds to expand your business.

Youve met with a couple angel investors, one of whom has experience in your type of business. She appears to be open and is interested in exploring a lending agreement/term sheet with you. She has asked that you provide a net worth/personal financial statement, so that she can decide whether or not to move forward with more formal discussions. Youve left that meeting with her and are now at your office looking at a blank PFS. You believe that you can complete the statement by yourself, without any assistance from an accountant. You are currently not married and will complete the form as a sole applicant. Heres the information that you need to put into the spreadsheet:

1. You have a personal signature revolving loan/line of credit from Wells Fargo. The loan is

   not guaranteed by your business, but by the other accounts you have with Wells Fargo. The loan/line of credit total amount is $10,000.00. The interest rate on any borrow funds is 8.0% per annum. To date, you have borrowed $3,000.00 from the bank on this note to complete some renovations on your home. You are currently only paying the interest that accrues every month.

2. You have two credit card accounts:

   1. Wells Fargo; total available: $5,000.00; current borrowed amount: $2,376.35.

      You are only making the minimum payment of $250.00 on this credit card

      account. Annual interest rate is 9.5%.

   2. Chase; total available: $3,000.00; current borrowed amount: $0.00. Annual

      interest rate is 11.00%.

3. Exactly four years ago you purchased a single-family home for yourself. Its a modest 3

   bedroom, 2 & 1/2 bath split level home thats within a 20 minute drive of your business. The home cost $210,000 when you bought it. Your parents gave you the 10% down payment for the mortgage. You financed the purchase of the house for 30 years at an annual interest rate of 4.00%. The loan will fully amortize in 30 years. Each month you pay an additional $100.00 towards the reduction of the principal amount of the loan.

The current value of the house (after doing an Internet search) is approximately

$225,000.

9. When you graduated from college your grandparents gave you money to start an

   investment/retirement account. The amount of the gift was $5,000.00 and you started an IRA with Chase through their managed accounts division. Originally, you purchased 150 shares in one of the index stock funds that they manage. You have not added anything to the IRA account since starting it. Currently, the individual shares are worth $45.00 each.

10. When you started your business seven years ago, you thought it would be a good idea to get an insurance policy that could help your employees manage the business for a short period in the event of your death. You took out a 10-year term policy worth $500,000 from The Guardian and since you are in good health, your quarterly payment for this policy is $158.00. At present, you have $8,500 in cash value on the policy. You have not borrowed any money from the policy.

11. When you started your business seven years ago, you asked your wealthy uncle to lend you some start-up funding. He agreed and provided you with $25,000.00 through a standard loan agreement. The loan agreement requires full payback in five years at a 10% annual interest rate. You met all of the payment dates.

12. Currently, you believe that the combined value of all your personal property is $26,000.00.

13. The IRS sent you a letter indicating that on your personal 1040 tax return from 2015, you did not pay enough income tax and that you still owe $8,400.00.

14. For the annual income section of the PFS, you currently pay yourself $5,000.00 gross each month from your business.

15. For the monthly expenditures section of the PFS, use your future calculated expenses from the course exercise for this information.

    
16. 

A B D E F G I J K L SOLELY OWNED APPLICANT SPOUSE 31,125.09 JOINTLY OWNED SCHEDULE 1 SCHEDULE 2 ASSETS CASH (INCLUDES CD'S, MONEY MARKETS) STOCKS, BONDS, IRA'S, KEOGH'S, ETC. CASH VALUE OF LIFE INSURANCE PERSONAL RESIDENCE(S) OTHER REAL ESTATE PERSONAL PROPERTY NOTES AND ACCOUNTS RECEIVABLE Business Value SCHEDULE 3 SCHEDULE 4 SCHEDULE TOTAL 31,125.09 0.00 0.00 0.00 0.00 0.00 0.00 500,000.00 0.00 0.00 0.00 5.11.02 500,000.00 TOTAL ASSETS 5.11.02 SOLELY LIABLE APPLICANT SPOUSE JOINTLY OWNED 36,000.00 LIABILITIES & NET WORTH NOTES PAYABLE TO BANKS-SECURED SCHEDULE 5 NOTES PAYABLE TO BANKS-UNSECURED SCHEDULES NOTES PAYABLE TO OTHERS-SECURED SCHEDULES NOTES PAYABLE TO OTHERS-UNSECURED SCHEDULE ACCOUNTS PAYABLE (INCLUDE CREDIT CARDS) REAL ESTATE MORTGAGES PAYABLE LOANS ON LIFE INSURANCE POLICIES SCHEDULE TOTAL 0.00 36,000.00 0.00 0.00 0.00 0.00 0.00 0.00 OTHER LIABILITIES TOTAL LIABILITIES NET WORTH (TOTAL ASSETS MINUS TOTAL LIABILITIES) CONTINGENT LIABILITIES 36,000.00 495.125.09 APPLICANT 0.00 0.00 0.00 0.00 SPOUSE JOINT AS GUARANTOR OR ENDORSER 36,000.00 495.125.02 TOTAL 0.00 0 0 0 ON LEASES OR CONTRACTS FOR LEGAL CLAIMS OR JUDGEMENTS TAX CLAIMS OR DISPUTES LETTERS OF CREDIT 0 FUTURE CAPITAL CONTRIBUTIONS OTHER 0 0 TOTAL CONTINGENT LIABILITIES S NOTE: CONTINGENT LIABILITIES SCHEDULE MUST BE COMPLETED. IF NONE, THEN WRITE "NONE" ON THE SCHEDULE. ANNUAL INCOME MONTHLY EXPENDITURES FOR YEAR ENDED: 2019 est. APPLICANT SPOUSE APPLICANT SPOUSE WAGES AND SALARIES FOR YEAR ENDED: 2019 est. per month MORTGAGE/RENT - RESIDENCE(S) ALL OTHER DEBT SERVICE STATE & FEDERAL INCOME TAXES BONUSES, COMMISSIONS, ETC. INTEREST AND DIVIDENDS RENTAL INC.(NET OF EXPENSE) PARTNERSHIP DRAWS, DISTRIB'S INSURANCE ALIMONY OTHER OTHER TOTAL CASH INCOME TOTAL MONTHLY EXPENSE PLEDGED? NAME AND LOCATION OF INSTITUTION Wells fargo - Kennesaw, GA Chase - Kennesaw, Ga Wells fargo - Kennesaw, GA ACCOUNT TYPE AND NUMBER Cash, 82-346589 Cash, 5989-3276 Checking, 5764-3891 BALANCE 23980 3576 3569 OWNED BY A SJ A SJ A SJ A SJ A SJ A SJ AS A S YES / NO YES / NO YES / NO YES / NO YES / NO YES / NO YES / NO YES / NO J 31125.09 J SCHEDULE 2 - STOCKS, BONDS, IRA'S, KEOGH'S, ETC. CURRENT MARKET VALUE AMOUNT PLEDGED DESCRIPTION COST # OF SHARES OWNED OWNED BY A SJ A SJ A SJ A SJ A SJ A SJ SCHEDULE 3 - LIFE INSURANCE AMOUNT PLEDGED INSURANCE COMPANY BENEFICIARY FACE VALUE CASH VALUE POLICY LOANS OWNED BY A SJ A SJ A SJ A SJ SCHEDULE 4 - REAL ESTATE (IF PARTIALLY OWNED, GIVE TOTAL PROPERTY INFORMATION, NOT YOUR SHARE) OWNED NET YEARLY CASH FLOW VALUE MORTGAGE BALANCE MONTHLY PAYMENT DESCRIPTION & LOCATION BY COST ASJ ASJ ASJ ASJ ASJ defined as total cash income less debt service, taxes and other cash expenses. SCHEDULE 5 - NOTES PAYABLE (EXCLUDE DEBT REPORTED IN SCHEDULE 4) COLLATERAL NAME AND ADDRESS OF NOTE HOLDER Navy Federal Credit Union, 300 Ernes TYPE OF LOAN Car loan CURRENT BALANCE 27,540 MONTHLY PAYMENT 650.88 None OBLIGOR A SJ A SJ A SJ A SJ A SJ A SJ A B D E F G I J K L SOLELY OWNED APPLICANT SPOUSE 31,125.09 JOINTLY OWNED SCHEDULE 1 SCHEDULE 2 ASSETS CASH (INCLUDES CD'S, MONEY MARKETS) STOCKS, BONDS, IRA'S, KEOGH'S, ETC. CASH VALUE OF LIFE INSURANCE PERSONAL RESIDENCE(S) OTHER REAL ESTATE PERSONAL PROPERTY NOTES AND ACCOUNTS RECEIVABLE Business Value SCHEDULE 3 SCHEDULE 4 SCHEDULE TOTAL 31,125.09 0.00 0.00 0.00 0.00 0.00 0.00 500,000.00 0.00 0.00 0.00 5.11.02 500,000.00 TOTAL ASSETS 5.11.02 SOLELY LIABLE APPLICANT SPOUSE JOINTLY OWNED 36,000.00 LIABILITIES & NET WORTH NOTES PAYABLE TO BANKS-SECURED SCHEDULE 5 NOTES PAYABLE TO BANKS-UNSECURED SCHEDULES NOTES PAYABLE TO OTHERS-SECURED SCHEDULES NOTES PAYABLE TO OTHERS-UNSECURED SCHEDULE ACCOUNTS PAYABLE (INCLUDE CREDIT CARDS) REAL ESTATE MORTGAGES PAYABLE LOANS ON LIFE INSURANCE POLICIES SCHEDULE TOTAL 0.00 36,000.00 0.00 0.00 0.00 0.00 0.00 0.00 OTHER LIABILITIES TOTAL LIABILITIES NET WORTH (TOTAL ASSETS MINUS TOTAL LIABILITIES) CONTINGENT LIABILITIES 36,000.00 495.125.09 APPLICANT 0.00 0.00 0.00 0.00 SPOUSE JOINT AS GUARANTOR OR ENDORSER 36,000.00 495.125.02 TOTAL 0.00 0 0 0 ON LEASES OR CONTRACTS FOR LEGAL CLAIMS OR JUDGEMENTS TAX CLAIMS OR DISPUTES LETTERS OF CREDIT 0 FUTURE CAPITAL CONTRIBUTIONS OTHER 0 0 TOTAL CONTINGENT LIABILITIES S NOTE: CONTINGENT LIABILITIES SCHEDULE MUST BE COMPLETED. IF NONE, THEN WRITE "NONE" ON THE SCHEDULE. ANNUAL INCOME MONTHLY EXPENDITURES FOR YEAR ENDED: 2019 est. APPLICANT SPOUSE APPLICANT SPOUSE WAGES AND SALARIES FOR YEAR ENDED: 2019 est. per month MORTGAGE/RENT - RESIDENCE(S) ALL OTHER DEBT SERVICE STATE & FEDERAL INCOME TAXES BONUSES, COMMISSIONS, ETC. INTEREST AND DIVIDENDS RENTAL INC.(NET OF EXPENSE) PARTNERSHIP DRAWS, DISTRIB'S INSURANCE ALIMONY OTHER OTHER TOTAL CASH INCOME TOTAL MONTHLY EXPENSE PLEDGED? NAME AND LOCATION OF INSTITUTION Wells fargo - Kennesaw, GA Chase - Kennesaw, Ga Wells fargo - Kennesaw, GA ACCOUNT TYPE AND NUMBER Cash, 82-346589 Cash, 5989-3276 Checking, 5764-3891 BALANCE 23980 3576 3569 OWNED BY A SJ A SJ A SJ A SJ A SJ A SJ AS A S YES / NO YES / NO YES / NO YES / NO YES / NO YES / NO YES / NO YES / NO J 31125.09 J SCHEDULE 2 - STOCKS, BONDS, IRA'S, KEOGH'S, ETC. CURRENT MARKET VALUE AMOUNT PLEDGED DESCRIPTION COST # OF SHARES OWNED OWNED BY A SJ A SJ A SJ A SJ A SJ A SJ SCHEDULE 3 - LIFE INSURANCE AMOUNT PLEDGED INSURANCE COMPANY BENEFICIARY FACE VALUE CASH VALUE POLICY LOANS OWNED BY A SJ A SJ A SJ A SJ SCHEDULE 4 - REAL ESTATE (IF PARTIALLY OWNED, GIVE TOTAL PROPERTY INFORMATION, NOT YOUR SHARE) OWNED NET YEARLY CASH FLOW VALUE MORTGAGE BALANCE MONTHLY PAYMENT DESCRIPTION & LOCATION BY COST ASJ ASJ ASJ ASJ ASJ defined as total cash income less debt service, taxes and other cash expenses. SCHEDULE 5 - NOTES PAYABLE (EXCLUDE DEBT REPORTED IN SCHEDULE 4) COLLATERAL NAME AND ADDRESS OF NOTE HOLDER Navy Federal Credit Union, 300 Ernes TYPE OF LOAN Car loan CURRENT BALANCE 27,540 MONTHLY PAYMENT 650.88 None OBLIGOR A SJ A SJ A SJ A SJ A SJ A SJ