For SBA lenders
Short answer
The SBA evaluates projected revenue and cash flow for reasonableness by comparing them to historical performance, industry averages, and the borrower's specific business plan and assumptions.
Lenders must underwrite 7(a) loans based on the borrower's ability to repay from projected cash flow. The SBA expects lenders to critically assess these projections, ensuring they are conservative, achievable, and well-supported by the business plan, industry data, and the borrower's experience. Unrealistic or aggressive projections are a red flag for prudent lending.
A new restaurant owner projects 20% year-over-year revenue growth. The lender scrutinizes these projections by comparing them to local restaurant industry trends, the owner's marketing plan, and the capacity of the new space, ensuring the assumptions for customer counts and average check size are realistic.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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