The base case is an opinion. The sensitivity table is where the study tells the lender how wrong that opinion can be before the loan stops working.
Every pro forma is a point estimate drawn from a distribution of outcomes, and underwriters know it — which is why a study without disciplined sensitivity work reads as advocacy. The Wert-Berater standard runs revenue shocks at ±5, 10, and 15 percent against the full ten-year pro forma, holding the expense structure’s genuine behavior: fixed costs stay fixed, variable costs flex with volume, and semi-variable lines flex partially. Shocking revenue while quietly flexing all expenses proportionally is the most common way weak studies manufacture resilience.
The output that matters is not the table itself but the break-even statement it supports: at what revenue decline does coverage cross 1.15x, and at what decline does it cross 1.00x? A project that holds program-minimum coverage at a 15 percent revenue haircut is structurally robust; one that breaks at 6 percent has told the committee where to set the conditions.
A number without a mechanism is unpersuasive, so each shock level should map to a real-world narrative: the 5 percent case is ordinary forecasting error; the 10 percent case is a competitor opening or a soft season; the 15 percent case is a regional downturn. When the study names the mechanism, the lender can judge the probability — which is the actual underwriting act.
Sensitivity on revenue alone is half the discipline. Expense-side shocks — insurance, labor, energy — bind hardest on thin-margin operations, and the cross case (revenue down, costs up) is the honest stress for cyclical assets. Our studies run the cross case because committees ask for it the moment they see one-dimensional tables.
President, Wert-Berater, Inc. — independent feasibility study consultants since 1998. 4,000+ engagements completed across all 50 states and internationally, evaluating $41.2 billion in project value for SBA, USDA, EB-5, conventional, and institutional financing decisions. Fiduciary duty runs to the lender and agency in every engagement.
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