Follow the guarantor's income
Trace K-1s from business tax returns and separately supplied statements to the person receiving the income. Review each business interest alongside the guarantor's personal return and financial statement.
Global Cash Flow analysis
Bring the borrower's businesses, guarantors and current bank activity into one global cash flow review. Trace income to its source, compare distributions across years and model debt service with the analyst's proposed adjustments.
The business and the guarantor, together
Update the distribution picture
Review recorded distributions to shareholders, including the guarantor, against year-to-date bank activity. Compare the current pace with prior-year distributions to inform the analyst's projection.
Test the proposed debt
Bring the current debt schedule and bank-statement financing activity into the review. Add missing obligations and proposed debt service, then produce pro forma DSCR with the assumptions visible.
Trace the guarantor through every K-1
A guarantor's income can come from several businesses. SpreadSpace brings together K-1s included with the business returns and K-1s supplied separately for outside business interests, so the analyst can follow each source back to the person.
Review the reported income, ownership interests and distributions alongside the Form 1040. Each supplied business return and supporting statement stays available for checking the source of a figure and understanding the business behind it.
Track distributions to each shareholder
Bank statements add the current-year view to the filed returns. Review year-to-date payments to the identified shareholders, including the guarantor, and compare them with the distributions reported for previous years.
The comparison supports the analyst's projected distribution for the year. Seasonal draws and one-off payments remain visible in the underlying transactions, so the projection can reflect the business's payment pattern and the period covered by the uploaded statements.
Reconcile the personal financial statement
Extract the personal financial statement and review its assets, liabilities and income alongside the guarantor's Form 1040 and the related business tax returns. Cross-reference the business interests, income sources and obligations across the supplied documents.
The documents keep their own reporting dates and source figures. An analyst can investigate a difference on the original page and decide how it belongs in the global cash flow analysis.
Bring hidden debt into debt service
Bank activity can reveal financing that does not appear on the borrower's debt schedule, including merchant cash advances (MCA), accounts receivable (AR) factoring and revenue-based financing (RBF). Review the advances and repayments to understand the relationship.
Analyst write-ins let the lender add those obligations to debt service manually. Seasonal facilities and ongoing financing relationships can be included according to the analyst's assessment, with the added amounts kept distinct from the document figures used alongside them.
Build pro forma DSCR with new debt
Use the debt playground to cross-reference the year-to-date debt schedule, personal and business tax returns and uploaded bank statements. Review the existing obligations before choosing the debt service used in the analysis.
Enter the proposed annual debt service as a write-in to produce a pro forma debt service coverage ratio (DSCR). The analyst can compare coverage with the proposed debt against the historical view and revise the inputs as the structure of the loan changes.
Keep the review tied to evidence
Source-backed figures open the document and the line they came from. Analyst additions remain identifiable in the analysis, and the resulting tables and visuals can be carried into the credit memo for review.
What goes into the analysis
- Bank data uploads
- SpreadSpace supports Plaid and Finicity data aggregation uploads for cash flow analysis.
- Business and outside K-1s
- Follow supplied K-1s from each business interest to the guarantor's personal income review.
- Shareholder distributions
- Compare year-to-date bank activity with distributions reported in prior years, including payments to the guarantor.
- Personal financial statements
- Review the PFS with Form 1040 and the related business returns, keeping each statement's date and source available.
- Debt found in bank activity
- Investigate MCA, AR factoring and RBF relationships and add the relevant debt service through analyst write-ins.
- Proposed debt
- Enter the annual debt service for the new loan and review its effect on pro forma DSCR.
- Source documents
- Open the underlying return, statement or debt schedule while reviewing a figure.
Questions lenders ask
Can I include K-1s from outside businesses?
Yes. Upload the separately supplied K-1s along with the borrower's business and personal returns. The guarantor review can include those outside business interests and their reported income and distributions.
Can I review distributions to other shareholders?
Yes. The shareholder analysis includes the identified owners, including those who are not guarantors. Review payments in the uploaded bank statements alongside the distribution figures reported on the returns.
How does the analysis use a personal financial statement?
The PFS provides assets, liabilities and income for the personal review. Cross-reference those figures with Form 1040 and the business returns, then investigate differences using the source documents.
Can I add debt that is missing from the schedule?
Yes. An analyst can enter additional debt service manually, including obligations identified from MCA, AR factoring or RBF activity in bank statements.
Can I model the proposed loan?
Yes. Add the proposed annual debt service as an analyst write-in and produce a pro forma DSCR. The debt playground brings the supplied debt schedules, returns and bank-statement debt information into the same review.