Sample report · fictional business · figures are illustrative
Harbor Street Coffee (example)
Feb 2027 to Jan 2030 · Start-up · Prepared November 11, 2026
Three-year summary
Year 1
Year 2
Year 3
Revenue
468,600
580,800
615,648
Gross profit
328,020
406,560
430,954
Gross margin
70.0%
70.0%
70.0%
Operating expenses
320,962
322,988
333,200
EBITDA
7,058
83,572
97,753
Depreciation
18,905
18,905
18,905
Interest
28,019
26,302
24,377
Net income
(39,866)
38,365
54,472
Net margin
-8.5%
6.6%
8.8%
Total loan payments (principal and interest)
42,179
42,179
42,179
Debt service coverage (EBITDA ÷ loan payments)
0.17x
1.98x
2.32x
Coverage after tax and owner tax distributions
0.14x
1.80x
2.06x
Cash at year end
85,853
119,794
164,619
Lowest month-end cash in the year
78,378
89,117
123,823
Loan balance at year end
235,840
219,964
202,162
Debt service coverage is EBITDA divided by scheduled principal and interest, the definition used in SBA SOP 50 10 8.1. For applications based on projections, SBA's standard is coverage of at least 1.15x within two years of loan funding. Loans of $350,000 or less can instead be processed as 7(a) Small loans if coverage reaches 1.10x within one year. Lenders may subtract taxes and owner draws from EBITDA and may require more, and different rules apply to changes of ownership.
Revenue Net incomeMonth-end cash balance
About these projections. They were prepared by the business owner and are estimates based on the assumptions stated in this document. Actual results will differ, and the differences may be material. They have not been audited, reviewed or compiled by an accountant, and they are not an approval, endorsement or commitment by any lender or by the U.S. Small Business Administration. What the model leaves out is listed on the next page. A monthly model with live formulas is provided in the accompanying Excel workbook.
Sources and uses of funds
Sources
Amount
Uses
Amount
Loan proceeds
250,000
Equipment, furniture and fixtures
95,000
Owner cash injection
45,000
Leasehold improvements / build-out
80,000
Opening inventory
8,000
Start-up and pre-opening costs
22,000
Working capital
90,000
Total sources
295,000
Total uses
295,000
Owner cash injection is 15% of loan plus injection.
Break-even
Fixed costs per month (at month 12 levels, including depreciation and interest)
$28,569
Contribution margin (sales less costs that vary with sales)
67.0%
Monthly sales needed to break even
$42,641
First month with a profit before tax
Jul 2027 (month 6)
Assumptions
Sales at full run-rate are $44,000 per month (Counter sales $40,000; Catering and wholesale $4,000).
Sales start at 55% of that level in month 1 and rise evenly to the full level by month 6.
From month 13, monthly sales are 10% above the full run-rate, and from month 25 a further 6% above that.
Food, beverage and packaging cost is 30% of sales, and other costs that scale with sales are 3%.
Fixed monthly costs in year 1 total $6,690: Rent $4,400, Utilities $700, Insurance $400, Marketing and advertising $650, Software and subscriptions $240, Repairs and maintenance $300.
Fixed costs and wages rise 3% a year from year 2.
The owner is paid a salary of $4,500 per month.
Staffing: 3 × Barista at $2,700 per month; 1 × Shift lead at $3,500 per month from month 4.
Payroll taxes and benefits are 12% of wages.
The loan of $250,000 is repaid in level monthly payments of $3,515 over 10 years at 11.50% interest.
Working capital: customers pay at the time of sale, 10 days of inventory are kept on hand, suppliers are paid in 15 days.
Equipment is depreciated straight-line over 7 years and build-out over 15 years.
Start-up and pre-opening costs of $22,000 are expensed in month 1.
The business is a pass-through entity, so no entity-level income tax is shown; 20% of profit is distributed to the owners in profitable months to cover their personal tax.
What these projections leave out
Sales are assumed to begin in the month the loan funds. Rent, wages or interest paid before opening are only included if they were entered as start-up costs.
No equipment is replaced or added after opening.
The interest rate is held constant for the life of the loan; many loans carry a variable rate.
Owners are assumed to take their salary and the tax distributions shown, and nothing more. Any further draw would reduce cash.
Tax is estimated on each profitable month without offsetting earlier losses, which overstates tax in a year that begins with losses.
Debt service includes this loan only. Any other business debt would lower the coverage shown.
Projected income statement: year 1 by month
Feb '27
Mar '27
Apr '27
May '27
Jun '27
Jul '27
Aug '27
Sep '27
Oct '27
Nov '27
Dec '27
Jan '28
Year 1
Counter sales
22,000
25,600
29,200
32,800
36,400
40,000
40,000
40,000
40,000
40,000
40,000
40,000
426,000
Catering and wholesale
2,200
2,560
2,920
3,280
3,640
4,000
4,000
4,000
4,000
4,000
4,000
4,000
42,600
Total revenue
24,200
28,160
32,120
36,080
40,040
44,000
44,000
44,000
44,000
44,000
44,000
44,000
468,600
Food, beverage and packaging cost
7,260
8,448
9,636
10,824
12,012
13,200
13,200
13,200
13,200
13,200
13,200
13,200
140,580
Gross profit
16,940
19,712
22,484
25,256
28,028
30,800
30,800
30,800
30,800
30,800
30,800
30,800
328,020
Operating expenses
Rent
4,400
4,400
4,400
4,400
4,400
4,400
4,400
4,400
4,400
4,400
4,400
4,400
52,800
Utilities
700
700
700
700
700
700
700
700
700
700
700
700
8,400
Insurance
400
400
400
400
400
400
400
400
400
400
400
400
4,800
Marketing and advertising
650
650
650
650
650
650
650
650
650
650
650
650
7,800
Software and subscriptions
240
240
240
240
240
240
240
240
240
240
240
240
2,880
Repairs and maintenance
300
300
300
300
300
300
300
300
300
300
300
300
3,600
Costs that scale with sales
726
845
964
1,082
1,201
1,320
1,320
1,320
1,320
1,320
1,320
1,320
14,058
Owner salary
4,500
4,500
4,500
4,500
4,500
4,500
4,500
4,500
4,500
4,500
4,500
4,500
54,000
Staff wages
8,100
8,100
8,100
11,600
11,600
11,600
11,600
11,600
11,600
11,600
11,600
11,600
128,700
Payroll taxes and benefits
1,512
1,512
1,512
1,932
1,932
1,932
1,932
1,932
1,932
1,932
1,932
1,932
21,924
Start-up and pre-opening costs
22,000
–
–
–
–
–
–
–
–
–
–
–
22,000
Total operating expenses
43,528
21,647
21,766
25,804
25,923
26,042
26,042
26,042
26,042
26,042
26,042
26,042
320,962
EBITDA
(26,588)
(1,935)
718
(548)
2,105
4,758
4,758
4,758
4,758
4,758
4,758
4,758
7,058
Depreciation
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
18,905
Interest
2,396
2,385
2,374
2,363
2,352
2,341
2,330
2,319
2,307
2,296
2,284
2,272
28,019
Net income
(30,559)
(5,895)
(3,231)
(4,487)
(1,823)
841
853
864
875
887
899
911
(39,866)
Projected cash flow: year 1 by month
At funding
Feb '27
Mar '27
Apr '27
May '27
Jun '27
Jul '27
Aug '27
Sep '27
Oct '27
Nov '27
Dec '27
Jan '28
Months 1-12
Net income
(30,559)
(5,895)
(3,231)
(4,487)
(1,823)
841
853
864
875
887
899
911
(39,866)
Depreciation
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
1,575
18,905
Change in receivables, inventory and payables
(8,000)
6,420
3,186
198
198
198
198
(198)
–
–
–
–
–
10,200
Cash from operations
(8,000)
(22,564)
(1,134)
(1,458)
(2,714)
(50)
2,615
2,230
2,439
2,451
2,462
2,474
2,486
(10,761)
Purchases of equipment and build-out
(175,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
Loan proceeds and owner cash injection
295,000
–
–
–
–
–
–
–
–
–
–
–
–
–
Loan principal repaid
(1,119)
(1,130)
(1,141)
(1,152)
(1,163)
(1,174)
(1,185)
(1,196)
(1,208)
(1,219)
(1,231)
(1,243)
(14,160)
Owner distributions for tax
–
–
–
–
–
(168)
(171)
(173)
(175)
(177)
(180)
(182)
(1,226)
Net change in cash
112,000
(23,683)
(2,264)
(2,598)
(3,865)
(1,212)
1,273
875
1,070
1,068
1,066
1,063
1,061
(26,147)
Cash at end of period
112,000
88,317
86,053
83,455
79,590
78,378
79,650
80,525
81,595
82,663
83,729
84,792
85,853
85,853
Years 2 and 3 by quarter
Y2 Q1
Y2 Q2
Y2 Q3
Y2 Q4
Y3 Q1
Y3 Q2
Y3 Q3
Y3 Q4
Revenue
145,200
145,200
145,200
145,200
153,912
153,912
153,912
153,912
Food, beverage and packaging cost
43,560
43,560
43,560
43,560
46,174
46,174
46,174
46,174
Gross profit
101,640
101,640
101,640
101,640
107,738
107,738
107,738
107,738
Operating expenses
80,747
80,747
80,747
80,747
83,300
83,300
83,300
83,300
EBITDA
20,893
20,893
20,893
20,893
24,438
24,438
24,438
24,438
Depreciation
4,726
4,726
4,726
4,726
4,726
4,726
4,726
4,726
Interest
6,744
6,634
6,520
6,404
6,283
6,160
6,032
5,901
Net income
9,423
9,533
9,646
9,763
13,429
13,552
13,680
13,811
Cash flow
Cash from operations
14,369
14,259
14,373
14,489
18,300
18,279
18,406
18,537
Loan principal repaid
(3,800)
(3,911)
(4,024)
(4,141)
(4,261)
(4,385)
(4,512)
(4,643)
Owner distributions for tax
(1,885)
(1,907)
(1,929)
(1,953)
(2,686)
(2,710)
(2,736)
(2,762)
Cash at end of quarter
94,537
102,979
111,398
119,794
131,147
142,330
153,488
164,619
Projected balance sheet
At funding
End of year 1
End of year 2
End of year 3
Assets
Cash
112,000
85,853
119,794
164,619
Accounts receivable
–
–
–
–
Inventory
8,000
4,400
4,840
5,130
Equipment and build-out, net of depreciation
175,000
156,095
137,190
118,286
Total assets
295,000
246,349
261,824
288,035
Liabilities and owner's equity
Accounts payable
–
6,600
7,260
7,696
Loan balance
250,000
235,840
219,964
202,162
Total liabilities
250,000
242,440
227,224
209,858
Owner capital contributed
45,000
45,000
45,000
45,000
Retained earnings
–
(41,092)
(10,400)
33,178
Total owner's equity
45,000
3,908
34,600
78,178
Total liabilities and equity
295,000
246,349
261,824
288,035
Key ratios
Year 1
Year 2
Year 3
Current ratio
4.02x
4.97x
6.14x
Debt to equity
60.35x
6.36x
2.59x
Debt service coverage
0.17x
1.98x
2.32x
Loan
Year 1
Year 2
Year 3
Interest paid
28,019
26,302
24,377
Principal repaid
14,160
15,877
17,802
Total payments
42,179
42,179
42,179
Balance at year end
235,840
219,964
202,162
$250,000 at 11.50% over 10 years; level monthly payment of $3,515. The full schedule is in the accompanying workbook.