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Business Stability Statement

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Business Stability Statement and Agreement

This Business Stability Statement and Agreement (the Agreement) is made effective as of by and between:

Client Name:

Respondent Business Name:

WHEREAS

WHEREAS, Client requires assurance of Respondent's financial capacity, continuity of operations, and capability to perform the obligations described in this Agreement; and

WHEREAS, Respondent represents and warrants that it will maintain sufficient financial stability and operational continuity for the Term of this Agreement and that the statements and disclosures set forth herein are true, accurate, and complete in all material respects; and

WHEREAS, the parties desire to set forth the Scope of Work, payment terms, and mutual covenants concerning confidentiality, representations regarding Business Stability, and remedies for material adverse changes.

Scope of Work

Payment Terms

Total Amount Payable:

All payments are due as provided above. Client may withhold payments only for undisputed amounts. Late payments shall accrue the Late Payment Fee set forth and Client shall remain responsible for reasonable costs of collection, including attorneys' fees, to the extent permitted by law.

Term and Termination

Term Commencement Date:

Term Expiration Date:

Either party may terminate this Agreement for cause upon written notice if the other party materially breaches any term and fails to cure within the Notice Period. Either party may terminate for convenience upon the Notice Period provided above, subject to payment for services performed through the effective termination date.

Business Stability Representations and Warranties

Respondent represents and warrants to Client that, as of the Effective Date and during the Term:

(a) Respondent is solvent, able to pay its debts as they come due, and has sufficient liquidity and access to capital resources necessary to perform its obligations under this Agreement;

(b) There is no pending or, to Respondent's knowledge, threatened action, claim, or proceeding that would materially impair Respondent's ability to perform; and

(c) There has been no Material Adverse Change since the date of Respondent's most recent financial statements, where "Material Adverse Change" means any change, event, circumstance, or effect that would reasonably be expected to prevent or materially impair Respondent from performing the Scope of Work or meeting the financial obligations described in this Agreement.

Respondent shall promptly notify Client in writing upon becoming aware of any event or circumstance that results in or is reasonably likely to result in a Material Adverse Change. Failure to provide timely notice shall constitute a material breach of this Agreement.

Confidentiality

Each party shall maintain in strict confidence all Confidential Information disclosed by the other party in connection with this Agreement and shall not disclose such information except as required by law or with the prior written consent of the disclosing party. Confidential Information includes financial statements, business plans, pricing, customer information, and other material nonpublic information. The receiving party shall use Confidential Information only for the purpose of performing obligations under this Agreement and shall take reasonable measures to protect such information from unauthorized disclosure.

Governing Law

This Agreement shall be governed by and construed in accordance with the substantive laws of the state specified below, without regard to conflict of laws principles.

Entire Agreement

This Agreement, including any schedules and attachments hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written. Any amendment or waiver of any provision of this Agreement must be in writing and signed by both parties.

Certifications

The undersigned officer of Respondent certifies under penalty of perjury that the foregoing representations and disclosures are true, accurate, and complete to the best of the signer's knowledge and belief, and that the signer is authorized to enter into this Agreement on behalf of the Respondent.

Client Printed Name:

By:

Date:

Respondent Printed Name:

By:

Date:

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What a Business Stability Statement Is and why it matters

The Business Stability Statement is a concise corporate affidavit that summarizes an organization’s financial position, operational continuity, ownership, and outstanding obligations. Lenders, counterparties, investors, and regulators commonly request it during credit reviews, contract negotiations, and compliance checks. The form typically includes company identification, recent financial metrics, contingent liabilities, key contracts, and a signer certification attesting to accuracy. When completed truthfully and supported by documentation, the statement helps counterparties assess creditworthiness and operational risk without requiring full audited statements. It is often requested in due diligence.

Why prepare a clear Business Stability Statement

A well-structured Business Stability Statement centralizes verified facts about a company and reduces time spent on follow-up questions. It supports underwriting, procurement, and compliance reviews by presenting standardized data, clarifying contingent obligations, and creating a signed record that helps manage credit and contractual risk.

Why prepare a clear Business Stability Statement

Who typically requests or completes this statement

Typical users include lenders, procurement officers, and corporate counsel who need a concise statement of stability during underwriting and contracting.

  • Lenders and underwriters request the statement to evaluate credit risk and repayment capacity during loan approval processes.
  • Healthcare and payer organizations use it to vet vendor stability and to confirm compliance with privacy and continuity requirements.
  • Real estate, construction, and procurement teams request statements for lease guarantees, contractor qualification, and bonding assessments.

Use the statement to standardize requests across departments and ensure consistent, auditable disclosures during negotiations and reviews.

Representative signers and requestors

Jane Doe, CFO

As chief financial officer, Jane prepares and certifies the Business Stability Statement using internal financial reports and board-approved data. Her signature attests to accuracy and is relied on in lending and contract negotiations; she coordinates supporting schedules and auditor communications as needed.

Mark Allen, Loan Officer

As a loan officer, Mark requests the statement to complete credit underwriting. He uses the document to assess liquidity, outstanding liens, and contingent liabilities, and to determine whether additional collateral or guarantors are required before loan closing.

Core sections to include in a professional statement

A Business Stability Statement should be concise, factual, and supported by documentation. Include identifiable sections so reviewers can quickly confirm the company’s stability.

Company ID

Legal name, DBA, entity type, state of formation, and EIN or tax ID so reviewers can confirm identity and corporate standing.

Ownership

List of principal owners or parent entities, ownership percentages, and any recent ownership changes affecting control or financial responsibility.

Financial snapshot

Key metrics such as cash balance, current assets, current liabilities, and a brief note on working capital or liquidity position.

Material obligations

Summary of loans, leases, guarantees, judgments, contingent liabilities, and significant off-balance-sheet obligations with dates and amounts.

Contracts & dependencies

Critical supplier or customer concentration, key contracts, and any material expirations or renewal risks affecting operations.

Certification

A dated signer certification that the statement is true and complete to the signer’s knowledge, plus signer contact details and title.

Step-by-step: completing a Business Stability Statement

Follow these stages to prepare a consistent, verifiable statement that reduces follow-up questions and speeds counterparty review.

  • 01
    Gather documents: Collect balance sheet, bank statements, loan schedules, and key contracts for reference.
  • 02
    Complete header: Enter legal entity name, EIN, formation state, and effective date.
  • 03
    Summarize finances: Provide current assets, liabilities, cash balance, and short explanation of major variances.
  • 04
    Sign and certify: Authorized officer signs, dates, and includes title; attach supporting schedules.

Where to send or file the completed statement

After completion, route the statement to the requesting party and retain an auditable copy. Use secure delivery channels appropriate for the recipient.

  • Lender or underwriter: Deliver via the lender’s secure portal or via encrypted email per their submission requirements.
  • Counterparty legal: Include the statement with contract signing packages and negotiation records for counterparties.
  • Internal records: Store a certified copy in corporate document archives and update compliance trackers.
  • Regulatory filing: Submit only when specifically required by regulators or contract terms; most jurisdictions do not require state filing.

Setting up an online completion workflow

Configure a reusable template, add validation, and set authentication to minimize user errors and create an audit trail for each submission.

Field Configuration
Template Name Reusable template with labeled fields and attachments enabled
Conditional Fields Show or hide liability details based on checkbox selections
Authentication Set email or SMS code signer verification and optional KBA
Storage Auto-save signed copies to secure repository or document management system

Delivery options and technical needs

Choose platforms and integrations that support secure transmission, compliance controls, and reliable audit logs.

  • Integrations: Salesforce, NetSuite, Microsoft 365, Google Workspace, Procore
  • File formats: PDF, DOCX, and exportable records with embedded audit trails
  • Authentication: Email link, SMS code, or advanced signer verification options

Ensure chosen platforms support industry compliance needs and long-term retention without altering signed record integrity.

Common eSignature vendor comparison for signing and distributing statements

The following high-level comparison highlights starting prices and common features; signNow is listed first for clarity and parity with other vendors.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Security and compliance controls relevant to signed statements

In-transit encryption: TLS 1.2/1.3
At-rest encryption: AES-256
Certifications: SOC 2 Type II available
HIPAA: BAA required for PHI
Legal compliance: ESIGN and UETA recognized
Audit trails: Preserves timestamps and actions

Key risks and potential consequences of incorrect statements

Misrepresentation: Civil liability
Contract rescission: Agreements may be voided
Regulatory fines: Agency enforcement actions
Funding delays: Loans or transactions may be postponed
Tax exposure: Incorrect reporting consequences
Signer risk: Personal liability if fraudulent

Common preparation errors to avoid

  • Incomplete financial detail or missing supporting schedules leads to follow-up requests and review delays.
  • Mismatched legal names or incorrect EINs prevent identity verification and can invalidate the statement for lenders.
  • Failing to disclose material contingencies, guarantees, or litigation skews risk assessment and may breach contract terms.
  • Missing signatures, incorrect signatory titles, or unsigned attachments are frequent reasons for rejection.

Real-world examples of how organizations use this statement

Case studies show common usage: lenders and property managers rely on the statement to accelerate credit decisions and close transactions more quickly.

Optica Ventures LLC

Optica prepared a concise stability statement to accompany lease negotiations.

  • The summary focused on liquidity and key contracts.
  • The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

Martin Properties

A property manager used the statement for vendor qualification onsite.

  • It captured financial reserves and insurance status.
  • I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently.

Frequently asked questions and practical answers

Answers to common execution and validity questions. If an issue is not addressed here, consult legal counsel or the requesting party for clarification.


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