Glossary · Reading the business
Financial projections
In short
Financial projections are forward-looking estimates of a business's future revenue, expenses, and profits. They are critical for evaluating the potential success and repayment capacity of your acquisition.
What it means in a deal
Your lender will require detailed financial projections as part of your SBA 7(a) loan application. These must realistically demonstrate how the acquired business will generate enough cash flow to cover the new debt service, operating expenses, and provide a return for you. Be prepared to defend your assumptions.
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 projections
- 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?
- What common indicators in a business's financial projections would signal a failure to meet prudent lending standards?
- Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition loan?
- How does a lender evaluate the reasonableness of a borrower's projections for future revenue and cash flow?
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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