SBA Form 413 – Personal Financial Statements

As part of our consulting practice we prepare reconsiderations to the SBA for failed 8(a) applications. Many of the common mistakes people make when completing the 8(a) application are related to the Form 413 – Personal Financial Statement.

Here are the most common problems we see with applicant’s SBA Form 413.

1. All Assets should be included on form 413. A common mistake applicants make is that they exclude the items on the form that are excluded from their adjusted net worth calculation such as their applicant business, personal residence, and retirement accounts. These items are assets and need to be included; the SBA will conduct their own analysis.

2. The business that the applicant is getting certified needs to have its value listed in section 3 if the entity is a corporation or section 5 if the entity is a limited liability company.

3. If the applicant has an IRA or 401k the terms and conditions of each account should be attached as part of the application. If an applicant is over the age in which they have access to the funds in the retirement account without penalty the funds are excluded.

4. If the applicant pays off their credit card each month but the card is used that month they cannot just leave it off the form, the balance of the account on the date of the Form 413 is created is required.

5. Personal property needs to be listed as an asset, and itemized, and must include house hold items this line on the form should not be left blank.

If you would like to see if your firm qualifies for the 8(a) certification we can usually help you make a determination in around a 10-minute phone call. If you have a returned or denied application we might be able to help you represent your case to the SBA potentially yielding an approval. We do not charge for these initial phone consultations.