A binding lease is strong evidence of an irrevocable commitment, so it usually comes before the application. The risk is real: if the application is refused, the obligation remains. Read the lease for any conditional or assignment clause and negotiate the commencement date with that risk in mind.
Sequence the risk you can control
The sequence that works for most small enterprises is to negotiate the lease and the equipment purchases first, sign what must be signed to make the investment genuine, and file with those documents in the file. What can be managed is the shape of each commitment: a lease whose term starts later, equipment ordered with staged deliveries, and improvements phased so that the largest spend happens after a decision. Do not, however, construct an arrangement that lets every dollar be recovered if the application fails, because that is precisely the fact pattern the at-risk requirement excludes.
Neither should anyone begin operating the business or working in it before the status exists. Travel to inspect premises, meet suppliers or sign documents is a different activity from running the restaurant and should be treated as such. Hypothetical example: a piano-restoration workshop plans to begin from a leased workshop, a spray booth, and supply agreements with dealers.
It should not commit to a launch date until the lease, permits, equipment delivery, and payment sequence can be shown coherently. Build a timeline that preserves evidence as each step occurs. A first review should identify whether a delay leaves funds uncommitted or makes the plan stale.
The usual error is submitting projections before key commercial agreements are executed, then having no contemporaneous record that the enterprise is ready to operate.