Small Business Administration (SBA)
SBA Form 413, Personal Financial Statement
OMB Control Number, 3245-0188
Justification – Part A Supporting Statement
Overview of Information Collection:
The purpose of this submission is to request renewal and revision of an existing collection. SBA Form 413, Personal Financial Statement (PFS), collects information regarding the assets and liabilities of certain owners, officers, and guarantors of the small business applicant receiving SBA financial assistance and is used to assess the applicant's repayment ability or creditworthiness. The SBA's Surety Bond Guaranty (SBG) Program uses the information collected on SBA Form 413 during the claim recovery process. SBA Form 413 is also used to collect information from applicants and participants in the SBA's 8(a)/Business Development (BD) and Women-Owned Small Business (WOSB) Programs certification processes to determine whether they meet the economic disadvantage requirements of the program.
Summary of Revisions:
The SBA intends to expand and clarify the Form 413 instructions so that the public is aware of the specific submission process for each program office. Specifically, the exclusion of Sole Proprietors from the Disaster Business Loan application has been removed, allowing all business types to be considered. The SBA also adjusted for inflation the economic disadvantage thresholds for the 8(a) BD and WOSB programs. To alleviate the need for applicants to constantly update their financial information during the application process, the information provided on Form 413 must now be current within 120 days of submission for the 7(a), 504, SGB, 8(a)/BD, and WOSB programs. Finally, SBA has revised the Privacy Act Statement to comply with OMB requirements.
Need & Method for the Information Collection.
The Small Business Administration (SBA) requires this information collection for the administration of financial and contracting assistance programs. For financial assistance programs authorized by Sec. 7(a) of the Small Business Act, 15 U.S.C. § 636 et seq., and Title V of the Small Business Investment Act of 1958, 15 U.S.C. § 695, et seq., SBA regulations require any loan guarantor and individual owners of the small business applicant to submit a personal financial statement to disclose their assets and liabilities (See, 13 CFR § 120.150).
For disaster business loans, SBA generally requires a personal financial statement from each applicant, each limited partner who owns 20 percent or more interest, each general partner, each managing member of a limited liability company, each stockholder owning 20 percent or more voting stock, and certain guarantors (See, Standard Operating Procedure 50 30 9).
SBA’s Standard Operating Procedure 50 45 3, chapter 7, section 3(f) imposes a similar requirement on applicants in the Surety Bond Guarantee (SBG) program. With respect to SBA’s contracting assistance programs, SBA regulations at 13 CFR §§ 124.104, 124.112, and 124.1002; and 13 CFR § 127.203 require, among other things, that applicants and participants submit financial information as part of the application for SBA’s contracting assistance programs.
Use of the Information.
For the financial assistance programs, the SBA, its participating lenders, Certified Development Companies (CDCs), and Sureties use the information collected by SBA Form 413 as part of the analysis to determine repayment ability and creditworthiness of applicants and their owners for an SBA loan guaranty or a disaster loan, or with respect to the SBG program to assist in recovery in the event that the contractor defaults on the contract. SBA (or the lender, CDC, or Surety) reviews the information at the time of application and maintains it in the file for use in loan servicing or auditing a loan or bond application, if necessary.
With respect to SBA’s contracting assistance programs, SBA uses the information for the 8(a)/BD Program and the WOSB Program to determine if the applicant or participant meets the economic disadvantage eligibility requirements. Participants in these programs are required to submit updated information annually to help SBA confirm that the participant continues to meet the economic disadvantage requirements of those programs.
Use of Information Technology.
SBA Form 413 is available in an electronic format at www.sba.gov, and is pdf-fillable for 7(a), 504, SBG, and Disaster Programs. The completed form will be submitted to the loan processing center electronically together with other supporting document for each loan application.
For the 8(a) Program, the SBA Form 413 is integrated into an online portal, mainly in electronic format, and must be submitted through certify.sba.gov.
Lastly, the information required on the SBA Form 413 for the WOSB Program is integrated into online portal WOSB.certify.sba.gov; therefore, only the electronic submission is required.
Non-duplication.
Personal financial statements are time sensitive, and it is unusual to utilize the same statement for more than one application for each program. The 7(a), 504, disaster and SBG programs require the information at the time of application and possibly in connection with a servicing action or to assist in recovery. Some respondents, particularly in the 8(a) BD Program are required to submit updated SBA Form 413 annually but as stated above, annual updates are necessary to ensure continued economic disadvantage status.
The WOSB Program require respondents to submit updated SBA Form 413 every three years. Any previously submitted data would be outdated and not provide an accurate picture of current financial condition of the applicant and/or Program participants.
Burden on Small Business.
The information collected would generally be required by most lending institutions. To minimize the burden on small businesses for 7(a) loans, 504 loans, and surety program purposes, SBA accepts personal financial statements in other formats that might have been prepared for the lending institutions or surety companies, provided that the statement submitted contains the same data collected by SBA Form 413. Alternate formats generally accepted by SBA include the Office of Thrift Supervision (OTS), Federal Deposit Insurance Corporation (FDIC) or Federal Reserve member bank forms, Lender’s equivalent form and accountant prepared statements.
Similarly, disaster loan applicants may submit the information using alternative formats, provided that the same data required by SBA Form 413 is submitted. We note that for purposes of the 8(a) BD Program and the WOSB Programs, the applicants or participants must use the electronic submission for data contained on the SBA Form 413 and submitted through certify.sba.gov and WOSB.certify.sba.gov, respectively.
Less Frequent Collection.
Failure to collect this information could impact the assessment of the applicant’s repayment eligibility and creditworthiness for the SBA loan and surety programs. For the 8(a) BD and WOSB programs, failure to collect this information would prevent SBA from complying with its statutory mandate to ensure assistance is granted only to firms owned and controlled by economically disadvantaged individuals.
Paperwork Reduction Act Guidelines.
No special circumstances exist. No confidential information is required that is not protected to the extent permitted by law including the Privacy Act and Freedom of Information Act.
Consultation and Public Comments.
The notice soliciting comments on this information collection was published on 01/22/2024, at 89 FR 3979. SBA received no comments on the collection.
Gifts or Payment.
There are no payments or gifts to respondents.
Privacy & Confidentiality.
There is no assurance of confidentiality indicated on the form. The information collected is protected to the extent permitted by law, including the Privacy Act, 5 U.S.C. 552a, and the Freedom of Information Act, 5 U.S.C. 552, which prohibits disclosure of confidential or privileged commercial or financial information. The form includes notices to the respondents regarding the use and disclosure of information submitted to SBA on this form. Applicants are not required to submit proprietary trade secrets, or other confidential information. Information collected on SBA Form 413 is maintained in the Agency’s Privacy Act System of Records as follows:
SBA 20 -- Disaster Loans Case Files https://www.govinfo.gov/content/pkg/PAI-2017-SBA/xml/PAI-2017-SBA.xml#sba20. SBA most recently published an updated System of Records Notice (SORN) for SBA 20 on November 19, 2021 (86 FR 64979), which can be located here: https://www.federalregister.gov/documents/2021/11/19/2021-25276/privacy-act-of-1974-system-of-records-notice.
SBA 21-- Loan Systems http://www.govinfo.gov/content/pkg/PAI-2023-SBA/xml/PAI-2023-SBA.xml#sba21. SBA most recently published an updated SORN for SBA 21 on April 30, 2021 (86 FR 23026), which can be located here: https://www.federalregister.gov/documents/2021/04/30/2021-09064/privacy-act-of-1974-system-of-records-notice
SBA 30 -- Government Contracting and Business Development System http://www.govinfo.gov/content/pkg/PAI-2023-SBA/xml/PAI-2023-SBA.xml#sba30. SBA most recently published an updated SORN for SBA 30 on January 17, 2023 (88 FR 2748), which can be located here: https://www.federalregister.gov/documents/2023/01/17/2023-00623/privacy-act-of-1974-system-of-records-notice.
SBA 26 – Power of Attorney Files. http://www.govinfo.gov/content/pkg/PAI-2023-SBA/xml/PAI-2023-SBA.xml#sba26. SBA published a SORN for SBA 26 on April 1, 2009 (74 FR 14890), which can be located here: https://www.federalregister.gov/documents/2009/04/01/E9-7050/revision-of-privacy-act-system-of-records-notice.
SBA adheres and complies with its Cybersecurity and Privacy Policy to maintain privacy and confidentiality of the data collections that are stated in the applicable Privacy Impact Assessment (PIA), specifically, the Capital Access Financial System PIA, Certify.sba.gov PIA, and Unified Lending Platform (ULP) PIA. The SBA collects controlled unclassified information to include its subcategories of business proprietary information and personally identifiable information such as the business name, individual owner’s name, social security number, address, phone number, and financial assets and debts. SBA Form 413 collects respondents’ social security numbers, which is helpful in distinguishing the applicant/participant from other individuals that may have the same or similar name or other personal identifiers.
Personally identifiable information is protected in accordance with SBA Cybersecurity and Privacy Policy, federal policies, guidelines, industry practices and standards which consists of encryption, access controls, least privileges, role-based permissions, Cybersecurity Awareness Training for all SBA staff, signed Rules of Behavior, and data minimization. Access to data is determined by user type as well as assigned roles. Access is limited by control assignment of a responsibility profile to all users. Each responsibility comes with a pre-determined set of privileges, limiting data that may be viewed to those screens and reports that are within the duties and needs of the user.
Sensitive Questions.
Questions perceived to be “sensitive” such as marital status and financial information are solicited in this collection so that SBA can make an informed credit and eligibility determination. 31 U.S.C. 7701 requires loan applicants and guarantors, as well as any indemnitor of a surety bond, to provide their social security numbers or other taxpayer identification numbers to participate in SBA financial assistance programs. Failure to provide this information may affect an applicant’s ability to obtain an SBA loan or bond. For other individuals, the submission of the social security number is voluntary and failure to provide their social security number may not affect their ability to obtain SBA assistance. SBA Form 413 collects respondents’ social security numbers, which helps distinguish the applicant/participant from other individuals who may have the same or similar name or other personal identifiers, and its use is permitted by Executive Order 9397.
SBA has also promulgated regulations at 13 CFR Part 102 that specify standards for the use and collection of social security numbers and other sensitive information and compliance with the Privacy Act and the Freedom of Information Act. The SBA requests consent from the applicant and collects their signature for the authority to include this sensitive information which is optional.
Burden Estimate.
Estimate of the hour burden of the collection of information for the respondents:
The 7(a)/504 programs have approximately 22,254 (13,969 + 8,285) total applicants per year. This number is based on a -year average of SBA annual lending activity for 7(a) and 504 loan programs. Since each 20 percent or more owner of the small business applicant must complete this information, SBA is estimating an average of 3 completed forms per 7(a) and 504 application.
In the SBG program, each principal is required to complete this information once per fiscal year, an average of two completed forms per SBG application with a total of 2,627 applications. This is based on a 4-year average period, and this information was collected from CAFS System Production for SBG program.
The disaster program has received 22,469 applications on a 4-year average with two completed forms per application for a total of 44,938 responses. This information was collected through disaster loan systems.
The 8(a) BD Program uses certify.sba.gov, for their data collection. 8(a) BD confirmed that they received 6,478 of estimated respondents based on the previous year (Fiscal Year 2023).
The WOSB Program uses WOSB.Certify.sba.gov, a separate platform from the 8(a) BD Program. The WOSB Program confirmed that they received 11,489 applications. This is based on a 3-year average period.
7(a)/504/SBG:
41,907 7(a) respondents per year (13,969 applications x 3 per application)
+ 24,855 504 respondents per year (8,285 applications x 3 per application)
+ 5,254 SBG respondents per year (2,627 applications x 2 per application)
72,016 Total 7(a)/504/SBG respondents
x 1.5 Hours per response for respondents to complete form
108,024 Total burden hours for all respondents
Disaster:
44,938 Respondents per year (based on 4-year average)
x 1.5 Hours per response for respondents to complete form
67,407 Total burden hours for all respondents (44,938 x 1.5 hours = 67,407)
8(a) BD:
6,478 Respondents per year in certify.sba.gov
x 1.5 Hours per response for respondents to complete form
9,717 Total burden hours for all respondents (6,478 x 1.5 hours = 9,717)
WOSB:
11,489 Women-Owned Small Business (WOSB) firms in WOSB.certify.sba.gov
x 1.5 Hours per response for respondents to complete form 17,234 Total (11,489 x 1.5 hours = 17,234)
Total combined burden hours for Respondents: 7(a)/504/SBG 108,024 + Disaster 67,407 + 8(a) BD 9,717 + WOSB 17,234= 202,382
The estimated cost to respondents for the hour burden of information collection is calculated at a salary equivalent to a GS-11, Step 1 Federal employee’s annual salary of $62,107 or $30/hour (rounded to the nearest whole number) based on the 2024 General Schedule (Base). The GS-11 pay grade is utilized in preparing this estimate as it is equivalent to the position normally held by an average financial institution employee in a mid-level position.
7(a)/504/SBG:
108,024 Total burden hours for all 7(a)/504/SBG respondents
x $30.00 Estimated cost per hour
$3,240,720 Total estimated cost to respondents
Disaster:
67,407 Total burden hours for all Disaster respondents
x $30.00 Estimated cost per hour
$2,022,210 Total estimated cost to respondents
8(a) BD:
9,717 Total burden hours for all 8(a) respondents
x $30.00 Estimated cost per hour
$291,510 Total estimated cost to respondents
WOSB:
17,234 Total burden hours for all WOSB respondents
x $30.00 Estimated cost per hour
$517,020 Total estimated cost to respondents
Total combined cost to respondents for burden hours: $3,240,720 + $2,022,210 + $291,510 + $517,020 = $6,071,460
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Burden per Response:
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Annual Burden:
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Estimated nonrecurring costs.
No additional annual costs beyond those identified in #12 above are anticipated.
Estimated cost to the Government.
Estimate of the burden hours of the collection of information for the Agency:
7(a)/504/SBG:
6,286 7(a) respondents per year*
+24,855 504 respondents per year
+5,254 SBG respondents per year
36,395 Total 7(a)/504/SBG respondents
x 0.5 Hour per response for the Agency to review the form
18,198 Total burden hours for the Agency
*SBA estimates that 85% of total 7(a) loan applications are processed by the Lenders using their delegated authority and therefore, only 15% of 7(a) responses (6,286) are reviewed by SBA.
Disaster:
44,938 Respondents per year (based on 4-year avg.)
x 0.5 Hours per response for the Agency to review the form
22,469 Total burden hours for the Agency
8(a) BD:
6,478 Respondents per year
x 0.5 Hours per response for the Agency to review the form
3,239 Total burden hours for the Agency
WOSB:
11,489 Respondents per year includes eligibility examinations, protests, and
appeals
x 0.5 Hours per response for Agency to review the form
5,745 Total burden hours for the Agency
Total combined burden hours for Agency: 18,198 + 22,469 + 3,239 + 5,745 = 49,651
Estimate of the annualized cost to the Agency for the hour burden:
7(a)/504/SBG:
$30.00 Cost per hour (Generally reviewed by a GS-11, Step 1, no adjustment
for locality)
x 0.5 Hours per response for Agency to review the form
x 36,395 Respondents per year
$545,925 Total annualized cost to the Agency for the burden hours.
Disaster:
$30.00 Cost per hour (Generally reviewed by a GS-11, Step 1, no adjustment for locality)
x 0.5 Hours per response for Agency to review the form
x 44,938 Respondents per year
$674,070 Total annualized cost to the Agency for the burden hours.
8(a) BD:
$36.00 Cost per hour (Generally reviewed by a GS-12, Step 1, no adjustment for locality)
x 0.5 Hours per response for Agency to review the form
x 6,478 Respondents per year
$116,604 Total annualized cost to the Agency for the burden hours.
WOSB:
$42.00 Cost per hour (Generally reviewed by a GS-13, Step 1, no adjustment for locality)
x 0.5 Hours per response for Agency to review the form
x 11,489 Respondents per year
$241,269 Total annualized cost to respondents for the burden hours.
Total combined cost for the Agency: $545,925 + $674,070 + $116,604 + $241,269 = $1,577,868
Reasons for changes.
The decrease in the hour burden for respondents is due to recent data obtain in 2024 reporting indicating fewer respondents in 7(a), SBG, and 8(a) BD programs.
Publicizing Results.
The results of this collection of information will not be published.
OMB Not to Display Approval.
SBA will display the expiration date of OMB approval.
Exceptions to "Certification for Paperwork Reduction Submissions."
There are no exceptions to the certification statement (Item 19) of the “Certification for Paperwork Reduction Act Submissions” of OMB Form 83-1.
Surveys, Censuses, and Other Collections that Employ Statistical Methods.
This collection of information does not employ statistical methods.
| File Type | application/vnd.openxmlformats-officedocument.wordprocessingml.document |
| File Modified | 0000-00-00 |
| File Created | 0000-00-00 |