SBA lenders view of personal balance sheet

August 02, 2024

by a searcher from Columbia University - Columbia Business School in Leesburg, VA, USA

Do lenders (SBA or otherwise) look at my personal balance sheet inclusive of my wife's 401k & IRAs or solely at my own assets + our joint assets like house & brokerage accounts? Since the spouse usually has to sign the PG anyway I would think all are included.

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Reply by a lender
from University of Missouri in St. Louis, MO, USA

The PFS has to be joint and signed by a spouse, even if there isn’t a spousal PG. with regards to how we would look at spousal support, that likely varies from bank to bank. A spouse not offering a PG COULD mean the banks global DSCR could take a hit since you would have all the personal debt obligations but no outside income to support the global cash flow. Also this could be relevant on a deal that is borderline. Outside income and/or liquidity could be the difference between a yes or no decision. Also of note, if a house is pledged as collateral and your spouse is on the title, their limited PG is required anyways. Also, IRAs and 401K (which you mentioned above) are excluded at most banks analysis since it isn’t included in any liquidation.

Reply by a searcher
from Baruch College in New Jersey, USA

From my experience your wife's finances aren't required on your personal balance sheet. You can choose to include her assets to improve your odds of approval or to reduce other collateral needs, but it's not required. If your home is required for collateral and it is jointly owned, then she will need to sign. Thanks ^redacted‌ for the tag.

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