UNDERWRITING GLOSSARY
Pro Forma
Pro Forma Financial Statement
A forward-looking financial projection based on stated assumptions.
What does Pro Forma mean?
A forward-looking financial projection based on stated assumptions. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Pro Forma in context
A developer prepares a pro forma showing lease-up, expenses and stabilized NOI.
Why it matters in financing
Pro Forma can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related underwriting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.