Which financial statements should you give the lender?

What does the lender want to see in your financial statements

The lender reads your financial statements to judge your ability to repay. It looks at the last few years of results, often compared with those of your industry.

BDC writes that banks also look at borrowing capacity. It is worked out from net income plus depreciation, minus annual repayments on existing term debt.

The lender compares your figures against each other. It checks whether revenue is growing, whether margins hold and whether debt is growing faster than profit.

It also reads the notes to the statements. They describe existing loans, commitments and related parties.

Hide nothing in those notes. A lender reads them in full.

Which financial statements should you provide

The exact list varies by lender. Here is what comes up most often.

• The balance sheet: what the business owns and owes
• The income statement: revenue, expenses and profit
• Statements for the last two or three fiscal years, as requested
• Interim statements for the current year, if the year is well along
• Cash flow projections, when the project is new

BDC mentions up-to-date financial statements and results from the last couple of years. It does not set a number of years. Ask your lender.

If the business holds the property through a separate company, provide statements for each company involved. The lender wants to see the whole picture.

For a rental property, add the property's income and expense statement. It shows net operating income, which is used to measure repayment.

If your year-end is several months behind you, prepare interim statements. The lender prefers recent figures to complete but old ones.

Audit, review or compilation: what is the difference

CPA Québec distinguishes three engagements. They differ in the level of assurance the accountant gives.

• Audit: the highest level of assurance, called reasonable assurance. The CPA gives an opinion on the statements
• Review: limited assurance. The CPA relies mainly on inquiries and analytical procedures
• Compilation: no assurance. The CPA puts the client's information into statement form without verifying it

Only CPAs holding a public accountancy permit can perform an audit. For a review, that permit or one limited to reviews is enough. Any CPA can perform a compilation.

The compilation engagement report replaces the former notice to reader for fiscal periods ending on or after December 14, 2021.

Which engagement will the lender require

That depends on the lender and the size of the loan. No single rule applies.

A smaller loan often needs fewer documents. BDC says requests under $100,000 need fewer and are generally faster.

For a larger loan, the lender may ask for statements prepared by an accountant. Write to the lender before ordering an engagement. You avoid paying for a level of assurance it did not ask for, or starting over.

A review or a compilation costs less than an audit. That saving is worth something only if the lender accepts it.

Some borrowers have only a compilation. The lender may then ask for more documents alongside: tax returns, bank statements or accounts receivable.

Get the accepted level in writing. A verbal answer gets lost when the application changes hands.

Are personal documents needed too

Often, yes. The lender checks the credit of those who guarantee the loan. BDC runs credit checks on guarantors and board members.

• A personal net worth statement from each guarantor, if the lender requires it
• Notices of assessment, on request
• Statements proving the down payment

A new building or a young business has no track record. The lender then leans more on projections and on the guarantors.

Guarantors do not all provide the same documents. A person who owns several properties will often need to present a list of assets and debts.

That list shows what each property earns and costs. It must match your financial statements.

An overvalued asset, even by mistake, damages trust. Use values you can support.

How do you prepare statements that hold up under review

The lender cross-checks your figures against its own calculations. An unexplained gap slows everything down.

• Make financial statements, tax returns and bank statements agree
• Explain any unusual item in writing
• Keep personal expenses apart from business expenses
• Send signed, complete statements with their notes
• Update the figures before sending if they are old

The lender also measures the debt service coverage ratio. BDC defines it as adjusted earnings, after certain items, divided by the current portion of term debt plus interest. The stronger this ratio, the simpler the review.

Keep your statements current all year, not only when you apply. A application ready to send avoids a race against the clock.

If last year's result is weak, explain it in a sentence: a lost tenant, renovations, the sale of an asset. The lender prefers an explanation to silence.

Finally, allow time with your accountant. A review or audit engagement takes weeks, and its schedule depends on them.

What should you do next

Ask your lender three things: the number of years, the engagement level it accepts and the cut-off date for interim statements.

Then talk to your accountant. They can tell you what is realistic for your business.

The guide on the commercial financing application and the commercial financing family complete this reading. PMECAP is a free comparison site; its form goes to a mortgage brokerage firm registered with the AMF. No result is promised.

FAQ

Sources

• BDC — How a bank looks at your business (accessed October 13, 2026)
• BDC — Business financing FAQs (accessed October 13, 2026)
• CPA Québec — CPAs and financial statements (accessed October 13, 2026)
• BDC — How to get approved for commercial real estate financing (accessed October 13, 2026)