If you’re being asked for a CPA letter for business funds, you’re not alone; it’s a common request in everything from real estate transactions to business loans. But here’s the thing: many business owners aren’t exactly sure what’s supposed to be in that letter, or why it matters so much.
If someone’s asked you for a CPA letter for business funds, you might be wondering what exactly should go into it? Whether you’re applying for a loan, buying real estate, or working with an investor, this type of letter plays a key role in verifying that your business can responsibly use its own funds.
First Things What Is a CPA Letter?
A CPA letter is a document prepared by a Certified Public Accountant that confirms specific financial details about your business. In this case, the focus is on confirming that your business has the funds available and is permitted to use them for a specific purpose, like a property purchase or investment.
It’s basically a way for lenders, underwriters, or other third parties to feel confident that your business is financially sound and using its own money.
What Should Be Included in the Letter?
Here’s a breakdown of the key elements that should be included in a CPA letter for business funds:
1. Business Identification
Start with the name of your business, its legal structure (LLC, Corporation, etc.), and its address. This confirms exactly who the letter is referring to.
2. Purpose of the Letter
The letter should clearly state why it’s being written. For example:
“This letter is being provided to confirm the availability and appropriate use of business funds for specific purposes.”
Clarity matters lenders and institutions want to know if the letter is tailored to your exact situation.
3. Confirmation of Fund Availability
This is the heart of the letter. The CPA confirms that your business has the necessary funds available, based on their review of your financial records. This might include:
- Recent bank statements
- Tax returns
- Profit and loss statements
The CPA won’t just take your word for it; they’ll need documentation to back it up.
4. Statement That Funds Are Not Borrowed
Most lenders want to make sure that the funds being used are not from a loan or line of credit. So, the CPA will typically include language like:
“To the best of my knowledge, the funds are not borrowed and are sourced from the business’s own accounts.”
This reassures the requesting party that the money is truly coming from your business, not another liability.
5. CPA’s Professional Opinion
The CPA may include a statement such as:
“Based on my professional review of the business’s financial records, I confirm that sufficient funds are available and eligible for the intended use.”
While CPAs can’t make guarantees, they can provide a professional opinion based on verified data.
6. CPA Contact Information and Credentials
At the end of the letter, you’ll see the CPA’s:
- Full name
- CPA license number
- Business address and phone number
- Signature and date
A Few Things a CPA Won’t Include
It’s important to understand what a CPA won’t do:
- Guarantee outcomes: (like promising a deal will close)
- Lie or guess: about your financials, they must base statements on documentation
- Include language that implies assurance: unless they’ve done a full audit or engagement to support it
Final Tips
If you’re getting ready to request a CPA letter:
- Make sure your financials are up to date
- Be clear about the purpose of the letter
- Give your CPA any deadlines you’re working with
Frequently Asked Questions About CPA Letter for Use of Business Funds
1. Who typically requests a CPA letter for business funds?
These letters are commonly requested by lenders, mortgage underwriters, banks, escrow officers, or investors. They want verification that your business has enough funds and the right to use them for a specific purpose.
2. Can any accountant write a CPA letter?
Not quite. The letter must be written by a licensed CPA and a Certified Public Accountant in good standing. Most institutions will not accept letters from bookkeepers or unlicensed accountants.
3. How long does it take to get a CPA letter?
If your financial records are in order, many CPAs can prepare the letter within 24 to 72 hours. Timelines may vary depending on the complexity of your request and how quickly you provide documentation.
Conclusion
Knowing what should be included in a CPA letter for business funds helps you avoid delays, reduce stress, and keep things moving. Think of it as your business’s professional stamp of financial credibility. And when it’s prepared by a licensed CPA who understands the expectations, it’ll hold real weight.
Need help getting one? Reach out to a CPA who offers this service and make sure they know exactly what your lender or partner is asking for.
