SBA Compliant Feasibility Study
SBA Feasibility Study Services
According to the Small Business Administration (SBA) § 120.160 Loan Conditions, The following requirements are normally required by SBA for all business loans: (a) Personal guarantees. Holders of at least a 20 percent ownership interest generally must guarantee the loan.
SBA, in its discretion, consulting with the Participating Lender, may require other appropriate individuals to guarantee the loan as well, except SBA will not require personal guarantees from those owning less than 5% ownership.
(b) Appraisals. SBA may require professional appraisals of the applicant’s and principals’ assets, a survey, or a feasibility study.
(c) Hazard Insurance. SBA requires hazard insurance on all collateral. (d) Taxes. The applicant may not use any of the proceeds to pay past-due Federal and state payroll taxes.
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Lender to Lender and CDC/504 loan program, feasibility studies are often required for new start-up businesses, new construction or expansion.
SBA Feasibility Study Requirements
​An SBA (Small Business Administration) feasibility study is a comprehensive analysis that assesses the viability of a proposed business venture, particularly when seeking financing through SBA loan programs such as the 7(a) or 504 loans. This study provides lenders with an objective evaluation of the project's potential for success. Key components typically include:
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Executive Summary: An overview of the business concept, objectives, and key findings of the feasibility study.
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Economic Feasibility: Analysis of the economic environment, including industry trends, economic indicators, and the potential impact on the business.
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Market Feasibility: Detailed market analysis covering target demographics, market demand, competition, and potential market share. This section demonstrates the business's ability to capture and sustain a customer base.
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Technical Feasibility: Evaluation of the technical requirements of the project, including necessary equipment, technology, and operational processes. It assesses whether the business has or can acquire the technical resources needed.
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Management Feasibility: Assessment of the management team's qualifications, experience, and ability to execute the business plan effectively. This includes evaluating the adequacy and continuity of management.
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Financial Feasibility: Comprehensive financial analysis, including:
Pro Forma Financial Statements: Projected income statements, balance sheets, and cash flow statements over a specified period (often 10 years).
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Discounted Cash Flow Analysis (DCF): Evaluation of the present value of future cash flows to assess the project's profitability.
Financial Ratios and Sustainability Analysis: Examination of key financial ratios to determine the financial health and sustainability of the business.
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Working Capital and Liquidity Analysis: Assessment of the business's ability to meet short-term obligations and maintain sufficient cash flow.
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Financial Feasibility Table of Contents:
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Pro forma (10 years)
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Discounted Cash Flow Analysis (DCF)
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Structure of the Assets and Liabilities
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Net Assets (Net Worth)
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Financial Sustainability Analysis
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Key ratios of the company's financial sustainability
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Working capital analysis
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Liquidity Analysis Financial Performance
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Overview of the Financial Results
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Profitability Ratios
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Analysis of the Business Activity (Turnover Ratios)
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Labor productivity
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Key Ratios Summary
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Rating of the Financial Position and Financial Performance
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Bankruptcy Test
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Calculation of the Final Rating of the Financial Condition
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​These components collectively provide a thorough evaluation of the proposed business venture, helping lenders determine its feasibility and the likelihood of success. A well-prepared feasibility study is crucial for securing SBA financing, as it demonstrates careful planning and a clear understanding of the business environment.
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Why Choose Wert-Berater, Inc.?
The SBA Compliant Feasibility Study is a document that loan underwriters depend on for that final decision to approve or reject your loan application. With over 3,500 feasibility studies completed since 1998, you can trust that your investment into a feasibility study with Wert-Berater, Inc. will comply with all SBA requirements.
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The feasibility study done well is crucial in today's high demand for SBA loans.
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