Glossary · Reading the business
Pro Forma Financials
In short
Financial statements that project a business's future performance based on assumptions, often adjusting historical results for anticipated changes or one-time events. Buyers use these to forecast the business's profitability under new ownership.
What it means in a deal
As a buyer, you'll create pro forma financials to show the lender how the business will perform after you acquire it, including your salary and new debt service. These are critical for demonstrating repayment capacity. Be realistic with your assumptions, as lenders scrutinize these projections heavily.
Related terms
Common questions about Pro Forma Financials
- Besides financials, what other key documents are needed for an SBA 7(a) loan?
- What if my personal liquidity is low, but the business's financials are very strong?
- How important is my personal credit score if the business I'm buying has strong financials?
- What specific diligence must a lender perform on seller's financials for a 7(a) acquisition loan?
- What if the seller's representations about the business's financials turn out to be significantly inaccurate during diligence?
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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