Lender Feasibility Studies for Credit Committees
A third-party feasibility study answers the question a credit committee cannot answer from the borrower's own projections: will this project generate the cash to repay this loan, and what happens when the assumptions miss?
Ordered by the credit side, relied on by committee
Most studies are initiated by a loan officer or relationship manager once a credit looks viable, then specified by an underwriter or credit officer who knows what committee will challenge. CDC staff order on behalf of 504 projects; USDA lenders order to satisfy 7 CFR Part 5001. Borrowers invited by their lender can upload materials to the same order.
| Role | Typical part in the order |
|---|---|
| Loan officer | Creates the order, enters project and capital structure |
| Underwriter / credit officer | Defines scope questions, reviews draft and model |
| Accounting | Invoices, payment records, institutional terms |
| Invited borrower | Uploads budgets, plans, financials and resumes |
Credits where repayment depends on the project itself
Ground-up construction
No operating history; coverage rests entirely on projected performance.
Start-ups and change of ownership
Including SBA 7(a) credits where the program calls for an independent study.
Special-purpose collateral
Hotels, RV parks, car washes, healthcare, venues and plants where value follows operations.
Major expansion
Where new capacity must find new demand before the debt can be carried.
Rural guaranteed lending
USDA B&I and OneRD loans with prescribed feasibility content.
Workouts
Restructures where a credible forward plan determines the decision.
From order to delivered report
Scope
Program, project type, location and capital stack entered in the portal.
Fix the fee
Fixed-fee proposal with standard and rush delivery, or manual review where needed.
Engage
Engagement letter accepted, payment or approved terms confirmed, documents uploaded.
Deliver
Status, questions and the draft and final reports all in the portal.
Full detail on the ordering page.
Built so an underwriter can check every finding
| Section | What committee gets |
|---|---|
| Market feasibility | Defined market area, quantified demand, competitive supply including pipeline, pricing support, capture and absorption |
| Site and technical | Access, zoning, utilities, permits, schedule, construction budget and contingency |
| Management | Operator experience and capacity for this specific business |
| Financial feasibility | Sources and uses, linked pro forma, DSCR at ramp-up and stabilization, break-even |
| Stress testing | Sensitivity by variable plus moderate and severe downside cases |
| Determination | Feasible, feasible with conditions, or infeasible, with reasons |
For the conventional-lending detail behind each section, see the bank feasibility study consultant page.
Program pages that set the governing standard
Lender feasibility study FAQ
What is a lender feasibility study?
An independent analysis, commissioned for underwriting, of whether a project can achieve the demand, revenue and cash flow needed to service the proposed debt. It reaches a stated determination rather than presenting the sponsor's case.
Who should order it, the lender or the borrower?
Either can, but a study ordered or directed by the lender carries more weight in committee and makes reliance straightforward. The borrower typically pays; independence comes from the preparer's lack of stake in the outcome.
When in the credit process should it be ordered?
Once the project budget, site and proposed loan structure are reasonably defined, and before the credit memo is finalized. Ordering after commitment removes most of its value.
How is it different from the bank feasibility study page?
The bank page covers conventional commercial lending in depth. This page explains how any lender, conventional, SBA, CDC or USDA, orders and uses a third-party study.
Order the study before the memo, not after the commitment.
Register your institution, then scope the project in the portal.
Analytical continuity
After the Investment: Independent Performance Monitoring
Carry the financing case into ongoing loan and portfolio review.
The analytical relationship does not have to end when the feasibility study is delivered. Wert-Berater can continue monitoring the asset against the original underwriting assumptions, updating market conditions, testing coverage, identifying performance variances and maintaining a recurring analytical record.
-
Individual Asset Monitoring
- Revenue
- Expenses
- NOI
- DSCR
- Occupancy
- Market rents
- Competitive supply
- Value
- Original underwriting assumptions
-
Watchlist Monitoring
Most relevant here- DSCR deterioration
- NOI deterioration
- Occupancy
- Revenue
- Expenses
- Market conditions
- Collateral / value
- Stabilization
- Refinancing risk
-
Construction Monitoring
- Progress
- Budget
- Cost-to-complete
- Schedule
- Change orders
- Draws
- Remaining costs
- Lease-up
- Stabilization
-
Portfolio Monitoring
- Portfolio performance
- Risk
- Concentration
- Market exposure
- Annual review
- Re-underwriting
- Watchlist
- Portfolio-level trends