Independent, lender-grade feasibility studies prepared for conventional commercial bank underwriting, construction and acquisition financing, and credit-committee review — nationwide since 1998.
Wert-Berater, Inc. is an independent bank feasibility study consultant preparing lender-grade feasibility studies for conventional commercial banks, community banks, regional lenders and institutional capital providers throughout the United States. Since 1998, Wert-Berater has completed 4,000+ engagements involving $43.8 billion in evaluated project value.
For an SBA-backed credit rather than a conventional loan, compare SBA underwriting changes under SOP 8.1.
A bank feasibility study independently determines whether market demand, management capability, project costs, operating performance and projected cash flow reasonably support the proposed financing. Our studies are prepared for credit officers, loan committees, underwriters and borrowers requiring independent third-party analysis before capital is committed — not to validate a conclusion the sponsor has already reached.
A bank feasibility study is an independent assessment undertaken to determine whether a proposed project is commercially, technically, managerially and financially capable of supporting the proposed debt. It is commissioned when a lender needs an answer that does not come from the borrower.
Borrowers frequently arrive unsure which document their lender actually asked for. The three are not interchangeable:
If your loan officer’s condition is specifically an independent feasibility study, a business plan will rarely satisfy it. Ask for the requirement in writing so the right document is commissioned once.
Primary market area definition, demand generators, existing competitive supply, announced and proposed supply, pricing, occupancy or utilisation, capture rate, penetration, leakage, absorption and seasonality. Demand is quantified from evidence, not asserted.
Location and site access, zoning, utilities, permits, the development schedule, construction costs, FF&E and contingencies — the physical and regulatory path to opening the doors.
Sources and uses, revenue assumptions reconciled to the demand analysis, operating expenses benchmarked against industry and comparable data, EBITDA or NOI, working capital, debt service, DSCR, break-even, debt yield where applicable, LTV and LTC, and IRR, NPV or DCF where a return test is relevant.
A base case alone tells a credit committee very little. Every study carries a moderate downside and a severe downside case, with sensitivity to revenue, occupancy, pricing, operating expenses, construction cost, interest rate, ramp-up and the stabilisation period. The question a committee is really asking is what happens when the assumptions miss.
| Lender question | Wert-Berater analysis |
|---|---|
| Is sufficient demand present? | Market demand analysis |
| Can the project achieve projected pricing? | Comparable pricing analysis |
| How quickly can it stabilise? | Absorption and ramp-up model |
| Are revenue assumptions supportable? | Independent demand-to-revenue reconciliation |
| Are expenses reasonable? | Industry and comparable benchmarking |
| Can debt be serviced? | DSCR analysis against the lender’s floor |
| What happens if assumptions miss? | Sensitivity and scenario analysis |
| Is equity sufficient? | Sources-and-uses and LTC analysis |
| Are construction costs realistic? | Development-cost review |
| Is management capable? | Management feasibility |
| What risks could impair repayment? | Risk matrix and mitigation analysis |
| Can the project survive downside conditions? | Moderate and severe downside stress testing |
| Are the assumptions auditable? | Fully linked financial model, no hard-coded results |
Ground-up development, expansion and major rehabilitation, including cost, contingency and completion analysis.
Existing operating businesses and commercial properties, with historical normalisation and forward projections.
Purchase combined with substantial capital improvement and a repositioning plan.
Facilities used by the operating company, where repayment depends on business performance.
Post-construction stabilisation financing and the take-out assumptions behind it.
Independent assessment supporting a refinance where forward performance governs.
Cash-flow-dependent projects where repayment depends materially on project performance.
Transactions structured outside SBA and USDA guarantee programmes.
Community, regional and national banks; commercial real estate and construction lenders; credit unions; private credit and debt funds; institutional lenders; loan participants and syndicate members; and the credit committees those institutions answer to. Sponsors also commission studies directly — because the strongest document a borrower can carry into committee is an independent analysis from a firm the lender already trusts.
Independence with a record to prove it. Unfavourable and conditioned determinations are delivered when the evidence requires them, and the fee is fixed in writing before the work begins so it never varies with the finding. The linked financial model is a standard deliverable rather than an upcharge, which means an underwriter can change an assumption and watch coverage move rather than taking a conclusion on trust. Every determination carries principal sign-off.
Client identities are confidential. The following are actual completed Wert-Berater engagements financed outside the SBA and USDA guarantee programmes, drawn from our published completion record.
Class A condominium sell-out. Determined favourable with conditions on a restructured 184-unit programme — the sponsor’s own base-case 170-unit programme at $60,250,000 was determined infeasible as proposed.
Phased mixed-use district. Determined feasible as a phased programme, with highest and best use supported parcel by parcel.
Seven-acre site. Event demand, venue economics, phased development and downside testing against a conventional first mortgage.
Determined favourable, with management feasibility favourable subject to conditions to closing; achievable pad rent governed the conclusion.
Determined feasible on all five determinations, with the financial model exceeding standard benchmarks for the asset class.
Determined feasible subject to conditions. The conservative pass-by traffic case fell below coverage floors; the destination-adjusted case governed, and the conditions were enumerated.
See the full published completion record →
Every other finding in a bank feasibility study eventually resolves into one number: whether projected cash flow covers the proposed debt service with enough margin for the committee to be comfortable. Conventional credit policies commonly set that floor at 1.20x or higher, and the applicable threshold is the lender’s own — it varies by institution, by asset class and by the risk profile of the individual credit. The study is built so that floor can be tested rather than asserted. Net operating income is derived from demand and pricing evidence rather than from the sponsor’s target, operating expenses are benchmarked against recognised industry statistics for the asset class, and the debt service is calculated on the loan actually being requested at the rate, amortisation and term actually proposed.
Coverage is then reported in more than one state. Stabilised coverage answers whether the project works once it performs as intended. Ramp-year coverage answers the more dangerous question of whether the borrower survives the period before that, which is where construction and start-up credits most often fail. Where guarantors are material to the credit, global coverage places the project’s cash flow alongside the other obligations those guarantors carry, because a project that covers on its own can still sit inside a borrower group that does not. And a break-even analysis states plainly how far occupancy, utilisation, pricing or volume can fall before coverage reaches 1.00x. A study that reports a single coverage figure at stabilisation has not told the committee what it needs to know.
A feasibility conclusion is only as sound as the cost basis underneath it, because an understated project cost quietly overstates every return and coverage figure that follows. The study examines total project cost as presented: land, hard construction cost, site work and off-site requirements, furniture, fixtures and equipment, professional fees, financing and carrying costs during construction, working capital at opening, and contingency. Each element is tested for internal consistency and against the evidence available for that asset class and that construction market, and any element that appears materially light is identified as such rather than accepted because the sponsor supplied it.
Contingency receives particular attention. A thin contingency on a ground-up project transfers risk directly to the lender, since a cost overrun on a fully advanced loan is funded either by unplanned sponsor equity or by a request to increase the facility. The analysis also considers how the construction contract allocates that risk — a guaranteed maximum price with a defined change-order process carries a very different profile from an open-book arrangement — and whether the contingency is sized to the delivery method actually being used.
Demand is the part of a credit file most easily asserted and least often proved. The study begins by defining a primary market area from the way the asset class actually draws custom, whether that is a drive-time catchment, a trade area, a corridor or a regional draw, and states the basis for that definition rather than adopting a radius by convention. Demand within that area is then quantified from published and subscribed evidence: American Community Survey data at tract and county level, Bureau of Labor Statistics employment and wage series, state transport department classified traffic counts where access governs performance, the relevant federal sector series, and industry benchmark corridors from sources such as RMA Annual Statement Studies.
Competitive supply is inventoried directly, including the pipeline of projects that will compete before the subject stabilises, since a market that looks undersupplied today can be oversupplied by the time a new facility opens. Capture is then derived rather than assumed, and pricing is supported by comparable evidence in the market rather than by the sponsor’s pro forma. Where the published record cannot answer a question, primary research is undertaken and identified as such. Every figure is cited to its source so an underwriter can pull the same table and reproduce the finding — the practical test of whether a study is independent analysis or advocacy with footnotes.
A feasibility study is not an appraisal and does not express an opinion of value; where value is required, that is a separate assignment under recognised valuation standards, and the two documents should corroborate rather than contradict one another. What the study does address is the repayment logic the collateral sits behind. Special-purpose and single-tenant collateral is treated with particular care, because an asset built for one use has a narrower market on a resale and a weaker recovery if the operating business fails. The analysis considers whether the facility as designed could plausibly be repurposed, and what a change of use would require.
Where the credit depends materially on guarantor support, the study frames the project’s cash flow so it can be read against the guarantors’ broader obligations rather than in isolation. The purpose is not to duplicate the lender’s own financial spreading but to make certain that the project analysis can be combined with it without a hidden change of assumption in between.
On a construction-to-permanent credit, the riskiest interval is the one between the last draw and stabilised operation, and it is the interval a weak study skips. The analysis addresses the construction and delivery schedule and what it depends on, whether the interest reserve is adequate for the schedule actually contemplated rather than an optimistic one, and what an entirely ordinary delay does to the reserve and to the borrower’s liquidity. It then sets out an absorption or ramp curve for the operating period: how quickly occupancy, utilisation, membership or volume can realistically build in this market given the competitive supply identified, and what coverage looks like in each of those years rather than only at the end of them.
A bank feasibility study is written to be read by people who did not originate the loan and who have no interest in seeing it approved. That shapes the deliverable. The determination is stated plainly — feasible, feasible subject to conditions, or infeasible — and where it is conditional the conditions are enumerated so they can be lifted into a term sheet as conditions precedent rather than discovered later. Assumptions are stated where they are made rather than buried in a model. Downside scenarios are presented alongside the base case, because a committee is chiefly interested in what happens when the plan does not hold. The fully linked financial model is delivered with the report as a standard part of the engagement rather than an upcharge, so an underwriter can change an assumption and watch coverage move rather than accepting a conclusion on trust.
The document is most useful when it arrives early enough to change something. Commissioned at pre-screen, it tells a lender whether a credit is worth the underwriting effort at all. Commissioned during underwriting, it supplies the demand, pricing and coverage evidence the file needs and identifies the conditions that ought to attach. At committee it stands as the independent voice in the package. After closing, the conditions it enumerated become the covenants and reporting requirements worth monitoring, and the linked model can be re-run when the structure changes — a different loan amount, rate, amortisation or equity contribution — without rebuilding the analysis from the beginning.
A bankable feasibility study consultant tests the borrower’s case rather than restating it. The review separates borrower assumptions from independently supported inputs and reconciles management projections to historical financial performance, market evidence and operating benchmarks. For an existing business, the analysis reviews available historical income statements, balance sheets and cash flows, identifies material nonrecurring items and explains departures between past performance and the forecast. For a start-up, where no operating history exists, the emphasis shifts to evidence supporting demand, pricing, staffing, ramp-up and opening working capital.
Management analysis considers whether the proposed team, operating plan and controls fit the scale and complexity of the project. Market risk, execution risk and operating risk are stated directly, together with the assumptions or mitigants that affect each conclusion. Independence does not mean disregarding management’s knowledge; it means testing that knowledge against evidence and making clear which inputs remain borrower assumptions.
When evaluating bank feasibility study consultants or bankable feasibility study consultants, lenders and borrowers should ask who performs the analysis, whether compensation depends on closing and whether the financial model and source trail are delivered for review. The same tests apply when selecting a bank feasibility study company or bankable feasibility study company: relevant project experience matters, but independence and transparent methodology determine whether the work can support underwriting.
The financial analysis links sources and uses, project cost, equity, working capital and financing terms to an operating forecast. Ten-year projections are used when the loan structure or project life requires a long view. Year 1 monthly projections are appropriate for construction completions, start-ups, seasonal businesses and projects with a material ramp-up, because annual totals can conceal an interim liquidity deficit. The model traces revenue drivers through operating expenses, cash flow, balance-sheet needs and debt service rather than inserting unsupported top-line growth.
Debt capacity is tested against the proposed principal, interest rate, term and debt amortisation schedule. The analysis addresses DSCR, leverage, working-capital adequacy and liquidity throughout the projection period, not solely at stabilisation. Break-even analysis identifies the sales volume, occupancy, utilisation or pricing needed to cover operating costs and debt service. If the requested debt cannot be supported under independently tested assumptions, the report identifies the constraint rather than solving it by changing an input without support.
Sensitivity tables isolate the effect of changes in the assumptions that matter most to repayment: volume, price, occupancy, utilisation, operating cost, construction cost, timing and interest expense. Scenario analysis then tests combinations of changes. A downside case reflects plausible underperformance; a severe downside examines a more consequential combination of adverse conditions. Both are measured against cash needs, liquidity, break-even performance and DSCR so the lender can see when additional equity, reserves or structural protection may be needed.
Where the available evidence supports it, probability analysis can supplement discrete scenarios by showing a range of outcomes and the assumptions driving that range. It does not convert uncertainty into a promise. Its purpose is to reveal concentration around market risk, borrower assumptions or operating risk and to help an underwriter distinguish a resilient transaction from one that works only at a single point estimate.
The report and linked model are organised so a loan officer or underwriter can trace each material conclusion to its source. The scope can incorporate the lender’s proposed structure, coverage requirement and credit questions at engagement. During review, clarifications address the analysis actually delivered; if loan amount, pricing, amortisation, project cost or equity changes, the revised structure can be tested without treating an earlier result as applicable to a different transaction.
This support informs underwriting but does not replace the lender’s credit decision, collateral review, legal review or borrower due diligence. No feasibility study guarantees approval. Its value is an independent, documented view of demand, management capability, financial feasibility, debt capacity and downside exposure for the credit file.
Conventional bank feasibility studies follow the commissioning lender’s scope and credit policy. SBA and USDA assignments add the applicable programme requirements, but all three require supportable market assumptions, a coherent financial model, management analysis and a clear assessment of repayment capacity. The correct scope depends on the actual financing path; a report prepared for one programme should not be relabelled for another without reviewing the governing requirements and transaction structure.
The analytical core is the same; the applicable program and lender instructions differ. For guaranteed credits, confirm the transaction-specific scope and documentation rather than assume a universal study mandate or coverage floor. See the SBA feasibility study guide for 7(a), 504 and ownership repayment distinctions. A conventional bank study follows the institution’s own credit policy and committee questions, agreed during scoping.
This page covers conventional commercial bank lending. Wert-Berater separately prepares independent feasibility studies for financing through the Export-Import Bank of the United States, including Make More in America and structured or project-finance transactions. Those are a different programme with different requirements — see the EXIM Bank feasibility study practice.
Legal disclosure. Wert-Berater, Inc. offices are mailing addresses only. Following the COVID-19 pandemic the firm has elected to work remotely; its office locations receive mail and are not staffed for visitors or in-person meetings. Headquarters mailing address: 1968 South Coast Hwy, Ste 2382, Laguna Beach, CA 92651.
Wert-Berater, Inc. is an independent provider of feasibility studies and other related services. The firm does not provide financing or equity investment advice, and does not arrange, broker, or place debt or equity capital of any kind.
All appraisal assignments are performed by Bruce E. Jones, MAI, ASA-GC, BCA, CMEA, a member of the Appraisal Institute since 2006, a staff member of Wert-Berater, Inc. and owner of Special Purpose Realty Valuation.
Thousands of real estate, business, and machinery appraisal and litigation assignments.