Financials at Your Fingertips: Crafting the Right Credit Request

Relying on self-reported information, trade references, or credit bureau reports alone is no longer sufficient. Financial statements provide an objective, standardized view of a company’s financial health, reducing bias and enabling more consistent, strategic credit decisions.

By requesting the right financial documents—income statements, balance sheets, and cash flow statements—credit teams can evaluate repayment capacity, identify emerging risks, and benchmark counterparties against industry peers. Done correctly, the financial request process becomes a strategic tool—not an administrative burden.

Article Topics

• Why Request Financial Statements

• Aligning Risk Appetite with Financial Statement Requests

• Financial Statement Sample Letter

Why Request Financial Statements

Financial statements play a critical role in analyzing both the current condition and historical trends of a counterparty’s:

• Profitability

• Leverage

• Liquidity

A well-structured financial request does more than support underwriting. It streamlines the credit review process, improves transparency, and reinforces trust-based partnerships with customers.

The Benefits of Financial Analysis

At its core, financial analysis helps credit and risk teams answer two fundamental questions:

1. Who are your highest-risk customers?

2. Are you being compensated appropriately for the level of risk you are taking?

Without timely and reliable financial data, these questions are difficult—if not impossible—to answer consistently across a growing portfolio.

The Three Financial Statements That Matter Most

Three core financial statements provide a comprehensive view of a company’s financial performance and risk profile. Each delivers unique insight:

Balance Sheet

Evaluates what a company owns (assets), owes (liabilities), and the residual ownership value (equity). It is essential for assessing leverage, solvency, and balance sheet strength.

Income Statement

Details revenue, expenses, and profit or loss over a specific period—typically monthly, quarterly, or annually. It highlights operating performance and earnings sustainability.

Cash Flow Statement

Tracks the actual inflow and outflow of cash during a period. Often the most critical statement for credit risk, it shows whether profits translate into cash available to meet obligations.

Establishing Thresholds for Requesting Financial Statements

Because financial risk is inherent in all business activity, companies should establish clear thresholds for when financial statements are required.

Common criteria include:

• Credit exposure or dollar amount

• Geography or jurisdiction

• New versus existing counterparties

• Payment terms or contract duration

Once a threshold is reached—and before finalizing agreements—financial statements should be requested, analyzed, and spread. The outcome supports a clear credit recommendation to:

• Absorb the risk

• Mitigate the risk (limits, collateral, pricing, guarantees)

• Avoid the risk altogether

Aligning Risk Appetite with Financial Statement Requests

Risk appetite defines how much risk your organization is willing to accept in pursuit of its objectives. It guides how risks are identified, measured, and managed across the business.

Risk appetite is company-specific and influenced by factors such as:

• Operational objectives

• Risk capacity

• Regulatory environment

• Market conditions

• Financial and growth goals

Financial Statement Request Sample Letters

When making informed credit decisions, few tools are as valuable as reviewing financial statements—far more insightful than relying solely on third-party payment behavior. Financials allow analysts to evaluate profitability, debt service capacity, and benchmark ratios against industry standards.

A well-crafted request letter:

• Saves time

• Standardizes information received

• Ensures consistency and professionalism

Best Practices for Financial Requests

• Timing: Send requests 60–90 days before a scheduled credit review

• Document clarity: Specify required statements (income statement, balance sheet, cash flow statement)

• Tone: Be courteous and transparent—this is a request, not a demand

• Deadline: Set a reasonable due date to manage expectations

  
  

Financial Statement Request Template 1

Dear [Counterparty Name],

I hope this message finds you well.

As part of our ongoing credit assessment process, we kindly request your most recent financial statements, including your income statement, balance sheet, and cash flow statement.

These documents will support a comprehensive review in line with our financial policies and risk management guidelines. Please be assured that all information will be treated with strict confidentiality and used solely for credit assessment purposes.

We would appreciate receiving the documents by [insert date]. Please let me know if you have any questions.

Best regards,

[Your Name]

[Your Title]

[Your Contact Information]

Financial Statement Request Template 2

Dear [Counterparty Name],

As part of our routine credit review, we kindly request your most recent financial statements. All information provided will be treated with the utmost confidentiality.

Please include:

• Income Statement

• Balance Sheet

• Cash Flow Statement

• Notes

We kindly ask that the documents be submitted by [insert date].

Thank you for your cooperation. We value our partnership and appreciate your support.

Best regards,

[Your Name]

[Your Title]

[Your Contact Information]

Final Thoughts

Credit teams deliver the greatest value when they focus on high-risk, high-limit, and strategically important counterparties. Establishing clear thresholds for requesting financial statements ensures time and resources are applied where they have the greatest impact.

Modern credit risk platforms take this a step further—prioritizing high-risk deals while automating decisions for lower-risk exposures.

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See how we help credit teams streamline financial requests, automate analysis, and make faster, more confident decisions. Book a demo today.

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Frequently Asked Questions

Is it normal to request financial statements?

Yes. Requesting financial statements is a standard business practice for due diligence on material or strategic customers, based on your organization’s risk appetite.

What is risk appetite?

Risk appetite defines the level of risk a business is willing to accept in pursuit of its goals.

Are audited financial statements required?

Audited statements are preferred, as they are independently verified. However, depending on exposure and risk, unaudited statements may be acceptable.