Bankable Feasibility Study & Financial Feasibility Study

A bankable feasibility study is an independent, third-party analysis that evaluates whether a proposed commercial real estate project is viable from market, financial, technical, management, and risk perspectives. The term "bankable" distinguishes studies that meet the evidentiary standards required by credit committees, SBA loan reviewers, USDA Rural Development offices, CDC underwriters, and institutional equity investors from generic market studies or promotional business plans.

The distinction matters. A business plan assumes viability and describes how a project will be executed. An appraisal determines the current market value of an existing or proposed asset. A feasibility study asks whether the project should proceed at all, and produces the evidence that allows a lender to make that determination independently.

A bankable feasibility study is defined by four characteristics: independence (the consultant has no financial interest in the project's outcome), evidence-based analysis (every assumption is sourced from institutional data and verified against local market conditions), internal consistency (revenue projections are tied to operational capacity and competitive benchmarks), and stress testing (the financial model demonstrates the project survives adverse conditions). Without all four, a study is not bankable.

MMCG Invest produces feasibility studies that credit committees rely on for underwriting decisions. Our studies are prepared in conformance with the Uniform Standards of Professional Appraisal Practice (USPAP) and meet the specific compliance requirements of SBA SOP 50 10 8.1, USDA 7 CFR Part 5001, and conventional commercial lending standards. For program-specific requirements, see our SBA feasibility study and USDA feasibility study methodology pages.

One federal programme mandates a third-party feasibility study in defined circumstances, and everywhere else it is the credit policy of the lender that asks for one. Understanding when a study is required allows borrowers and lenders to initiate the process before it becomes a bottleneck in the loan timeline.

SBA 504 and 7(a) programs. Under SOP 50 10 8 (effective June 2025), SBA lenders operate under prescriptive underwriting standards that create a uniform floor regardless of the originating institution. Lenders most often ask for a feasibility study where loan repayment depends on projections rather than historical performance, complete changes of ownership, special-use or limited-purpose properties ( hotels , car washes , gas stations , cold storage, bowling alleys), new construction or major expansion projects, and high-risk or specialized industries including hospitality, entertainment, and healthcare. For SBA 504 loans, the equity injection schedule escalates with risk: 10% standard, 15% for special-use properties, and 20% for startups purchasing special-use properties. The feasibility study directly informs this equity determination. For a detailed overview of SBA program requirements, see our SBA feasibility study page.

USDA Business and Industry (B&I) guaranteed loans. Under 7 CFR Part 5001, a full feasibility study by an independent qualified consultant is mandatory for new businesses seeking guaranteed loans exceeding $1 million. The USDA codifies five explicit feasibility dimensions: economic, market, technical, financial, and management. Independence requirements are stricter than SBA; the consultant must have zero financial interest in the project. For loans not meeting simplified analysis criteria, the financial section may require an examination opinion prepared under AICPA attestation standards. Use our USDA eligibility map to check whether your project site qualifies for Rural Development financing. For full USDA program details, see our USDA feasibility study page.

USDA REAP, Community Facilities, and other Rural Development programs. Each program has its own feasibility threshold. REAP projects require technical feasibility demonstrating energy production calculations and simple payback period. Community Facilities loans exceeding $1 million to new entities require full feasibility studies.

Conventional commercial lenders. Feasibility studies are standard practice for hospitality, healthcare, development, and capital-intensive projects regardless of government guarantee. Construction lenders, CMBS conduits, and life insurance companies routinely require independent demand and financial analysis before committing capital.

EB-5 visa regional center projects. Under the Matter of Ho precedent, feasibility studies must be comprehensive, detailed, and credible, and must support the economic impact report demonstrating creation of at least 10 full-time jobs per investor.

Every MMCG feasibility study evaluates the proposed project across five integrated analytical dimensions. This framework satisfies the explicit requirements of USDA 7 CFR Part 5001 and exceeds the implicit standards of SBA and conventional lending programs.

Market feasibility. We define primary, secondary, and tertiary trade areas using drive-time isochrones and radius rings, then quantify the demand-supply gap for the proposed use. The analysis includes demographic profiling (population, household income, consumer expenditure by category), competitive benchmarking (occupancy, ADR, rents per square foot, absorption rates), penetration rate calculations, and month-by-month absorption projections. Data sources include MMCG database benchmarks, licensed demographic datasets, mobile location analytics, and traffic count databases.

Financial feasibility. This is the lender's primary focus. We construct a ten-year pro forma (income statement, cash flow, balance sheet) with revenue assumptions tied directly to the market analysis findings. Financial metrics include debt service coverage ratio (DSCR) calibrated to the minimum in the lender's own credit policy, internal rate of return (IRR), net present value (NPV), cash-on-cash return, development margin, and break-even occupancy for each revenue stream. Sensitivity analysis stress-tests the model under adverse scenarios using tornado diagrams (variable impact ranking) and two-variable data tables. To compare financing structures across programs, use our SBA and USDA loan comparison calculator .

Technical feasibility. We evaluate construction cost estimates using industry benchmarking data, site suitability, zoning compliance (setbacks, height, density, FAR), infrastructure capacity, and construction timeline. For projects in seismically active regions, our U.S. seismic hazard map provides preliminary site-level risk data. For flood-prone areas, our FEMA flood zone map screens flood zone designation and wetland proximity.

Management feasibility. We assess operator qualifications, staffing plans benchmarked to industry ratios, organizational structure, and experience gaps. Where the borrower lacks direct industry experience, we identify mitigation strategies: advisory board formation, management company engagement, or key personnel recruitment plans.

Risk assessment. The final analytical layer integrates findings from all four dimensions through a structured risk evaluation covering market risk, construction risk, regulatory risk, and financial risk. Each risk is documented with probability assessment, potential impact, and specific mitigation strategies. This section converts qualitative concerns into quantified underwriting inputs.

The final deliverable includes an executive summary with a clear go/no-go recommendation, project description, methodology statement, five analytical chapters, risk assessment with structured framework, summary and recommendations, and appendices (demographic profiles, competitive data, financial model workbook, and assumptions book with complete audit trail).

The method is set out in full in MMCG's feasibility study methodology.

Every asset class the firm studies has a framework of its own, hotel to self-storage to community facility, and the property type sets the revenue driver the model must prove: ADR and RevPAR for a hotel, fuel volume for a gas station, acuity-based tiers for assisted living, NNN rent for industrial. Select any property type to view the dedicated methodology.

MMCG produces feasibility studies across every major commercial real estate asset class. Each property type involves distinct market dynamics, revenue models, regulatory requirements, and lender expectations. Below is a summary of the asset classes we serve, with links to our dedicated analytical methodology for each.

Hospitality and recreation . Hotel and hospitality feasibility studies evaluate ADR, occupancy, and RevPAR against the competitive set using STR benchmarking data. Glamping and short-term rental studies analyze seasonal demand, platform revenue modeling, and regulatory compliance. RV park and marina studies evaluate site-specific demand generators and capital-intensive infrastructure requirements. Restaurant feasibility addresses the highest-risk operating category in commercial real estate.

Retail, food, and service. Retail center feasibility studies use trade area analysis, retail leakage modeling, and NNN lease benchmarking. Gas station studies model fuel volume, c-store revenue, and traffic count analysis. Truck stop and travel center studies evaluate diesel throughput, commercial vehicle parking demand, and multi-revenue stream operations. Car wash and shopping mall feasibility address specialized demand and structural market conditions.

Residential and healthcare. Multifamily feasibility studies analyze rent comparables, absorption rates, and unit mix optimization. Note that SBA 504 and 7(a) programs cannot finance non-owner-occupied apartment buildings. Affordable housing studies address LIHTC compliance, income-restricted rent modeling, and public funding layering. Assisted living and senior care feasibility evaluates acuity-based revenue tiers, staffing ratios, state licensing, and Certificate of Need requirements. Medical office studies address physician demand, payor mix, and healthcare-specific zoning.

Industrial, warehouse, and flex . Industrial feasibility studies model manufacturing capacity, supply chain positioning, and build-to-suit versus speculative development. Warehouse and distribution studies evaluate logistics corridors, clear height requirements, and e-commerce demand drivers. Flex space studies analyze the hybrid office-warehouse market. Self-storage feasibility addresses market saturation analysis and revenue management modeling.

Specialty and community . Mixed-use development requires parallel pro forma modeling for each component (residential, retail, office) integrated into a single consolidated financial model. Childcare feasibility studies evaluate licensing capacity, subsidy revenue, and enrollment projections. Sport and recreation facilities and fitness centers address membership-based revenue modeling. Community facilities studies serve USDA-financed healthcare, educational, and public safety infrastructure in rural communities.

Five financing routes, each with its own feasibility trigger: SBA 504 and 7(a) under SOP 50 10 8.1, USDA B&I under 7 CFR Part 5001 for a new business above $1 million, REAP and Community Facilities, conventional construction, CMBS and life-company lenders, and EB-5 regional centers under Matter of Ho, and the study is calibrated to the compliance requirements of each.

Built for credit committees . Every deliverable is structured to the format, metrics, and evidentiary standards that loan reviewers, SBA processing centers, USDA state offices, and CDC underwriters evaluate. Our studies reduce diligence friction and accelerate funding timelines because they arrive in the format the reviewer expects.

Sector breadth with specialist depth. We maintain dedicated analytical frameworks for 30+ commercial real estate asset classes. A hotel feasibility study uses different revenue drivers, competitive metrics, and industry benchmarks than a gas station or assisted living facility . Generic consulting firms apply the same template to every property type. We do not.

Transparent, disciplined delivery. Every engagement receives a fixed-fee proposal. No hourly billing, no scope creep, no surprises. Our standard fee structure is 50% upon engagement and 50% upon delivery of the study.

Data infrastructure. We subscribe to and analyze institutional-grade datasets including licensed commercial real estate databases, demographic and psychographic profiling systems, mobile location analytics, and satellite imagery. Every market assumption in the study is sourced, cited, and verifiable.

Regulatory currency. Our methodology reflects SBA SOP 50 10 8 (effective June 2025), USDA 7 CFR Part 5001, and current CDC underwriting standards. When program guidance changes, we update our assumptions and report formats accordingly.

Interactive screening tools. Beyond traditional feasibility reports, MMCG maintains a suite of interactive tools for preliminary site screening: the USDA rural development eligibility map for checking whether a project qualifies for B&I financing, the SBA and USDA loan comparison calculator for modeling program costs side by side, the USDA B&I loan calculator for estimating guarantee fees and repayment, the U.S. seismic hazard map for site-level earthquake risk screening, and the FEMA flood zone and wetlands map for checking flood designation and environmental constraints.

Fees start at $4,900 and rise with property type, project scale, the number of revenue streams requiring independent modeling, financing program compliance requirements, and the depth of competitive and regulatory analysis the lender expects. A single-use property in a well-documented market with straightforward zoning costs less than a multi-component mixed-use campus requiring parallel pro forma modeling and simultaneous SBA and USDA compliance.

Every engagement receives a fixed-fee proposal before work begins. No hourly billing, no scope creep, no cost surprises during the engagement. Our standard fee structure is 50% upon engagement and 50% upon delivery of the completed study.

Speak Directly With the Author of Your Study:

Michal Mohelsky, J.D., | Principal | mmcginvest.com

Contact: michal@mmcginvest.com

Phone: (628) 225-1110

Engagements are led by Michal Mohelsky, J.D., Practicing Affiliate of the Appraisal Institute. Feasibility studies are prepared under USPAP discipline, aligned with SBA SOP 50 10 8.1 for 7(a) and 504 loans and with 7 CFR Part 5001, Appendix A to Subpart D for USDA Business and Industry, REAP, and Community Facilities financing. Engagements start at $4,900 with fixed-fee scoping. Standard delivery is 9 to 16 business days, with rush turnaround available from 5 business days. A senior analyst responds to proposal requests within 12 business hours from the firm's San Francisco office.

Standard delivery is 9 to 16 business days from engagement to final delivery, and expedited delivery is available within 5 business days for an additional fee. Complex projects with multiple revenue streams, large-scale developments, or engagements requiring parallel SBA and USDA compliance may require additional time. The seven steps below are what happens in that window, from the scoping of the engagement to post-delivery support.