Glossary · Reading the business
Financial projection
In short
A forecast of the business's future revenue, expenses, and profits. Lenders use this to assess your ability to repay the loan, especially for businesses with limited history or significant changes.
What it means in a deal
For a business acquisition, you'll need to provide your lender with a financial projection showing how the business will perform post-acquisition. This should incorporate your operational plans and demonstrate sufficient cash flow after debt service to cover all loan payments and provide working capital.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Financial projection
- Can incomplete or inconsistent financial projections lead to an SBA 7(a) loan denial?
- Are there specific criteria for my business plan and financial projections for an acquisition loan?
- What constitutes a failure of 'prudent lending standards' regarding financial projections for a 7(a) loan?
- If the acquired business has a recent history of losses, but a strong projection under new ownership, can it still be approved?
- What common indicators in a business's financial projections would signal a failure to meet prudent lending standards?
- What if my personal financial statement shows low liquid assets?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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