How to Build a Start-Up Cash-Flow Projection Lenders Will Trust
Last updated October 9, 2026
A cash-flow projection shows, month by month, what money comes in, what goes out and what is left. Lenders read it to see whether your business survives its first months and can repay a loan. Here is a method that keeps it credible. Futurpreneur Canada also publishes a free cash-flow template you can use.
Step 1: list start-up costs
Every one-time cost before you open, with a quote or source behind each line. Total them.
Step 2: list where the money comes from
Your own cash, the loan, any grants. Funding minus costs is your opening cash. If it is negative you have a gap to close before you apply.
Step 3: forecast sales conservatively
Start with month-one sales you can defend, then a growth rate you can explain. A plan that doubles sales every year needs proof. Run a second case at half the sales.
Step 4: add costs
Cost of goods as a share of revenue, then monthly operating costs: insurance, software, marketing, phone, accounting, vehicle. Include your own pay, taken from revenue and not from the loan.
Step 5: add the loan payment
Use the quoted rate and term. A standard loan payment is the same every month, so put it in every month of the term.
Step 6: check the lowest cash balance
The number that matters is the lowest closing cash over the whole period. If it goes negative, change the plan before a lender finds it.
Mistakes that cost trust
- Revenue that includes sales tax you owe the government.
- No downside case.
- Owner pay missing or paid from the loan.
- Figures in the plan that differ from the spreadsheet.
The Canadian Startup Funding Kit ($39) is a 36-month model that does steps 1 to 6 with live formulas, plus a plan template. See also the documents checklist. Not financial advice; no guarantee of approval.
KAE MOB ENTERTAINMENT INC., operating as K.M.E. Incorporated · Ontario corporation · CRA business number 753923143RC0001 · Mailing address: 22 John St, Toronto, ON M9N 2B3, Canada · Email: kmeinchq@gmail.com