Proof of funds is a bank statement or a document that demonstrates that a company or a person has the money to finalize the transaction. The purpose of the document is to ensure that the financial ability that is required for the transaction is legitimate and procurable. The document is mostly used for funding those projects that require a huge amount of money for investing, often for real estate transactions.

There is a possibility that proof of funds is used by certain people that might carry out financial scams. This makes it necessary to present with a proof of funds for investigating the other party thoroughly and performing diligence checks.