Glossary · Reading the business
Pro Forma Cash Flow Analysis
In short
A projection of a business's future cash inflows and outflows, assuming certain events like an acquisition. It helps evaluate the business's ability to generate future cash to service debt.
What it means in a deal
Your lender will require a pro forma cash flow analysis, often covering several years post-acquisition. This projects how the business will perform under your ownership, including debt service. Ensure your projections are realistic and supported by your business plan, as lenders heavily rely on this to assess your repayment capacity and the viability of the deal.
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 Pro Forma Cash Flow Analysis
- What specific cash flow analysis adjustments are required for a change-of-ownership with a full standby seller note?
- When underwriting a 7(a) loan, how does a lender ensure that personal resources of the principals are properly considered in the global cash flow analysis?
- Can future cash flow or profits from the acquired business count as equity injection?
- How can an SBA 7(a) loan help with ongoing cash flow for my business?
- What is the primary factor a lender considers when evaluating the cash flow from an acquired business?
- Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition loan?
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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