A sources and uses of funds statement shows where a project’s money will come from and what it will pay for. To create one, list every funding source and project cost for the same period, support the estimates, and confirm that total sources equal total uses. It is a planning tool for a business plan or financing package—not necessarily the lender’s official closing or disbursement form.
What the statement does
The statement puts a project’s funding and spending on one page: sources are the money or capital available to fund the project, and uses are the expenditures and cash needs the project requires. A Georgia State SBDC business-plan outline reproduced by the U.S. Department of Veterans Affairs describes the statement as showing how much funding is needed, where it comes from, and how it will be used, and says the totals must match (VA-hosted Georgia State SBDC business-plan outline). It is useful when planning a startup or expansion and when presenting a business plan to a lender or investor.
| # | Preview | Product | Price | |
|---|---|---|---|---|
| 1 |
|
Financial Accounting | $90.00 | Buy on Amazon |
| 2 |
|
Loose Leaf for Financial and Managerial Accounting | $105.23 | Buy on Amazon |
| 3 |
|
Accounting for Beginners (All-in-One): Everything You Need to Learn Financial & Managerial... | $22.97 | Buy on Amazon |
| 4 |
|
ISE Financial Accounting | $95.00 | Buy on Amazon |
| 5 |
|
Loose Leaf for Financial Accounting | $99.39 | Buy on Amazon |
The core test is simple: total sources = total uses. If the totals differ, a cost or funding source may be missing, duplicated, classified inconsistently, or calculated incorrectly. Do not hide a mismatch with an unsupported balancing figure.
How to create the statement
-
Define the project and its time frame
State what the financing will accomplish, such as opening a location, buying a business, expanding capacity, or purchasing equipment. Use one consistent project period and include costs needed to reach the same milestone. A project covering only the purchase price, for example, may omit costs required to open and operate.
Do these 3 things before closing this tab:
1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsSpecial offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy.#1 Best Overall
-
Build a documented schedule of uses
Group costs into clear rows that fit the project. Possible categories include land or a building, construction or leasehold improvements, machinery and equipment, furniture and fixtures, inventory and supplies, startup or transaction costs, closing charges, working capital, and an appropriate reserve. These are examples, not a universal list approved by every lender.
Base each amount on relevant evidence: vendor quotes, construction bids, equipment and inventory price lists, or other project-specific estimates. The Mississippi Development Authority’s business-planning toolkit recommends using bids for construction and price lists for equipment, machinery, and inventory, and suggests checking with utility providers about deposits (Mississippi Development Authority business-plan toolkit). Record how each figure was derived and keep the supporting quote, bid, or calculation with the schedule. If a row combines several costs, retain an itemized breakdown.
Rank #2
-
Estimate working capital from projected cash flow
Working capital is cash available for operating needs; it is not a substitute for listing project purchases. Use a cash-flow forecast to estimate when receipts will begin and when payroll, rent, utilities, suppliers, and other bills will come due. Identify any periods when operating cash flow may be negative, then estimate the amount needed to cover the timing gap.
The Mississippi toolkit illustrates using funds remaining after initial purchases to address negative operating cash flow in later startup months. That is an example of the role working capital can play, not a standard amount or percentage for every business.
Free tools Windows power users keep installed
One-click scans. No signup required.
Special offer. See more information about Outbyte and uninstall instructions. Please review EULA and Privacy policy. -
List funding sources according to their actual status
Possible sources include an owner contribution, a term loan, a line of credit, outside investor equity, seller financing where applicable, or another documented source. The SBDC outline includes term loans, lines of credit, personal equity, outside equity, and other sources as examples. Distinguish funds that are committed or available from applications, proposed investments, and other contingent funding. Do not present hoped-for financing as secured.
-
Reconcile both sides
Add the sources independently from the uses. Check each line against the detailed cost schedule, loan request, owner contribution, or other supporting record. If the totals do not match, find and correct the underlying omission, duplication, classification, or calculation; do not insert an unexplained plug.
Rank #4
-
Confirm the recipient’s format and evidence requirements
Ask the lender or investor for its current template, category definitions, and required attachments. A planning statement may not use the same categories or detail as a lender’s formal authorization, settlement, or disbursement paperwork.
Illustrative statement layout
This generic drafting aid shows how the two sides can appear together. Replace the example categories with the actual project costs and funding sources, and use the lender’s instructions when they differ.
Best Value
| Sources of funds | Amount | Uses of funds | Amount |
|---|---|---|---|
| Owner contribution | $___ | Property or leasehold costs | $___ |
| Term loan | $___ | Equipment and fixtures | $___ |
| Line of credit | $___ | Inventory and supplies | $___ |
| Outside equity or other documented source | $___ | Renovation and transaction costs | $___ |
| Working capital and reserve | $___ | ||
| Total sources | $___ | Total uses | $___ |
Check whether financing fits the use
When considering more than one funding plan, compare how certain each source is, whether the proposed use is permitted by the lender, what documentation is needed, and whether the plan covers operating cash needs and timing gaps—not just initial purchases.
Also consider the repayment term in relation to what the financing pays for. FDIC small-business financial-management guidance recommends financing current assets with current liabilities and fixed assets with longer-term loans aligned with the asset’s useful life. It states: “Fixed assets should be financed with long term loans that match the use life of the asset.” (FDIC Money Smart for Small Business). Treat this as general planning guidance, not a universal formula or lender-approval rule.
Planning statement versus SBA disbursement paperwork
A borrower-prepared sources-and-uses table helps explain the project’s funding plan. It should not be assumed to replace program-specific closing or disbursement records. A reproduced SBA Form 1050 describes recording ultimate payees, amounts disbursed and remaining, itemized settlement costs, borrower-injection sources, and supporting evidence. The available copy is marked 04-19 and displays an expiration date of April 30, 2022, so it is not evidence of current forms or procedures (reproduced SBA Form 1050). For SBA financing, ask the lender which current forms and records apply to the specific program.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
