{"ok":true,"canonical_url":"https://dealroom.so/glossary/financial-projections","api_url":"https://dealroom.so/api/public/glossary/financial-projections","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"financial-projections","term":"Financial projections","group":"Reading the business","definition":"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":"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.","url":"https://dealroom.so/glossary/financial-projections","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"},{"slug":"business-plan","term":"Business plan","url":"https://dealroom.so/glossary/business-plan"},{"slug":"repayment-capacity","term":"Repayment capacity","url":"https://dealroom.so/glossary/repayment-capacity"},{"slug":"dscr","term":"DSCR","url":"https://dealroom.so/glossary/dscr"}],"related_questions":[{"question":"Can incomplete or inconsistent financial projections lead to an SBA 7(a) loan denial?","url":"https://dealroom.so/sba-7a/questions/can-incomplete-or-inconsistent-financial-projections-lead-to-an-sba-7-a-loan-denial"},{"question":"Are there specific criteria for my business plan and financial projections for an acquisition loan?","url":"https://dealroom.so/sba-7a/questions/are-there-specific-criteria-for-my-business-plan-and-financial-projections-for-an-acquisit"},{"question":"What constitutes a failure of 'prudent lending standards' regarding financial projections for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-a-failure-of-prudent-lending-standards-regarding-financial-projections-fo"},{"question":"What common indicators in a business's financial projections would signal a failure to meet prudent lending standards?","url":"https://dealroom.so/for-lenders/questions/what-common-indicators-in-a-business-s-financial-projections-would-signal-a-failure-to-mee"},{"question":"Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition loan?","url":"https://dealroom.so/sba-7a/questions/are-there-any-restrictions-on-the-use-of-cash-flow-projections-for-an-sba-7-a-acquisition-"},{"question":"How does a lender evaluate the reasonableness of a borrower's projections for future revenue and cash flow?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-evaluate-the-reasonableness-of-a-borrower-s-projections-for-future-reven"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Financial projections","url":"https://dealroom.so/glossary/financial-projections","source_type":"DealRoom Data"}}