USDA Feasibility Study Consultants for B&I, Community Facilities and REAP

A USDA feasibility study is a report prepared by an independent qualified consultant acceptable to the Agency that evaluates the economic, market, technical, financial and management feasibility of a project financed under 7 CFR Part 5001. USDA requires it for Business and Industry guaranteed loans greater than $1,000,000 to a new business and for Community Facilities guaranteed loans greater than $1,000,000 to a new entity or an entity conducting a new activity. The Agency may require one on any other loan where the lender's analysis is not sufficient. MMCG Invest prepares USDA feasibility studies on a fixed fee, structured so that the lender's credit evaluation and the USDA State Office review can be written directly from the study.

Three sections of 7 CFR Part 5001 set the triggers. For Business and Industry, 5001.306 requires a feasibility study prepared by an independent qualified consultant for guaranteed loans greater than $1,000,000 to a new business, meaning a business with fewer than one full year of operation or one that has not yet reached stable operations, including an existing enterprise entering a new market or labor area. Below that threshold the Agency may still require a study, and the scope of every study is determined by the Agency. For Community Facilities, 5001.304 requires a financial feasibility report on every guaranteed loan and an independent consultant's study for loans greater than $1,000,000 to a new entity or a new activity. For REAP, 5001.307 requires a technical report on every project and a full feasibility study for renewable energy systems only when the lender or the Agency deems one necessary.

The study is part of the complete application. Under 5001.303 the lender submits projected balance sheets, income statements and cash flow statements running from current financial statements through at least two years of the project performing at full operational capacity or stable operations, each supported by a list of assumptions, together with a pro forma balance sheet at closing. Under 5001.202 the lender's credit evaluation must contain a written evaluation of the feasibility study and ratio comparisons against industry standards such as the Risk Management Association. A deficient study makes the application incomplete and stops the Agency clock before it starts.

Appendix A defines the five feasibility components every USDA study must address. MMCG structures each engagement around them.

Economic feasibility assesses the project site and its environment: labor availability, infrastructure and utility capacity, transportation access, proximity to raw materials and markets, community economic conditions and environmental risks. Appendix A places environmental risks within the economic component, and the Agency's own environmental review proceeds separately under 5001.207.

Market feasibility quantifies demand drivers, competitive supply, trade area demographics, pricing and absorption, and the sustainability of the projected market share. Where supply contracts, offtake agreements or franchise agreements support the revenue case, the study evaluates their reliability and enforceability.

Technical feasibility evaluates site suitability, facility design, production technology and commercial availability, regulatory compliance and construction risk. For integrated processing systems, 5001.105 requires evidence of technical merit, including completion of two operating cycles at designed production level.

Financial feasibility presents independent projections built from verifiable market data and industry benchmarks: pro forma income statements, balance sheets and cash flows, debt service coverage, sensitivity and breakeven analysis, and the proposed capital structure tested against the USDA equity requirements.

Management feasibility evaluates the qualifications, industry experience and organizational capacity of the ownership and management team. For cooperatives and community-owned entities it also covers governance, member participation and succession.

B&I is the largest USDA commercial guarantee program. USDA reports $1.83 billion in B&I obligations in fiscal year 2024 and $2.11 billion in fiscal year 2025, with accommodation and food services and manufacturing together accounting for roughly half of program dollars. A feasibility study is mandatory for guaranteed loans greater than $1,000,000 to a new business. Equity is set by 5001.105: 10 percent for existing businesses, and for new businesses 20 percent balance sheet equity or 25 percent of total project cost, rising to 25 percent when the lender requests the loan note guarantee before construction is complete. USDA may raise the requirement on higher-risk loans after considering the strength of the feasibility study and the experience of management. The term is set by the useful life of the assets financed and may not exceed 40 years. For fiscal year 2026 USDA guarantees 85 percent of loans under $5 million and 80 percent of loans from $5 million to $25 million, with a 3 percent initial guarantee fee and a 0.55 percent annual retention fee. Read the full requirements on our USDA B&I feasibility study page.

Community Facilities finances essential public-use facilities owned by public bodies, community-based nonprofits and federally recognized tribes: hospitals, clinics, assisted living, childcare, schools, fire and public safety, and cultural and community buildings. Every CF guaranteed loan requires a financial feasibility report under 5001.304. A lighter financial feasibility analysis is permitted only for loans of $25 million or less to an existing facility, loans secured by general obligation bonds or tax-supported income, or borrowers whose last three years of audited statements show the ability to pay all existing and new debt service. Every other guarantee requires a financial feasibility study with an examination opinion under AICPA attestation standards, and a loan greater than $1,000,000 to a new entity or new activity also requires an independent consultant's study. Projections for assisted living, skilled nursing and similar residential facilities may not exceed 90 percent occupancy. For fiscal year 2026 the CF guarantee is 80 percent with a 1.25 percent initial fee and a 0.5 percent annual retention fee. CF direct loans follow 7 CFR 1942.17 and require a financial feasibility report on every project, with an independent third-party report on projects above $500,000. Read the full requirements on our USDA Community Facilities feasibility study page.

REAP supports renewable energy systems and energy efficiency improvements for agricultural producers and rural small businesses. For REAP guaranteed loans, 5001.307 requires a technical report on every project, tiered by total project cost: a vendor or installer certified report at $80,000 or less, Appendix C for energy efficiency improvements above $80,000, Appendix D for renewable energy systems above $80,000 and below $200,000, and Appendix E for renewable energy systems of $200,000 or more. A full feasibility study is required for renewable energy systems when the lender or the Agency deems it necessary. USDA's final rule published October 1, 2026 and effective October 16, 2026 converts REAP grants to a post-completion reimbursement model with a 25 percent maximum grant share, which makes the REAP guaranteed loan the pre-construction financing path. Read the full requirements on our USDA REAP feasibility study page.

Since 2020 the B&I, Community Facilities Guaranteed, REAP Guaranteed and Water and Waste Disposal Guaranteed programs have operated under a single regulation, 7 CFR Part 5001, with one application process and one annual notice of guarantee percentages and fees. The fiscal year 2026 notice, published March 9, 2026, remains the operative schedule until USDA publishes the fiscal year 2027 notice. Our regulatory reference page on 7 CFR Part 5001 walks through the full framework.

7 CFR 5001.3 defines a qualified consultant as an independent third-party person possessing the knowledge, expertise and experience to perform the specific task required. USDA does not maintain an approved or pre-qualified consultant list. Acceptability is decided case by case by the State Office, and Rural Development guidance asks the processing office to verify three things: a declaration of any relationship held with the applicant before the work began, a written qualification statement showing credentials and experience, and active professional liability insurance. A person acting as a compensated agent of both the borrower and the lender on the same loan is a conflict of interest under 5001.3, and a developer, installer or lender with a financial stake in the outcome cannot prepare the study.

MMCG Invest operates as an independent consulting firm with no lending, brokerage, development or installation interests. Engagements are led by Michal Mohelsky, J.D., Practicing Affiliate of the Appraisal Institute and FMVA, and every study carries the preparer's qualification statement and independence disclosure the Agency asks for.

The feasibility study is a documented failure point in USDA's own audit history. In 1999 the Government Accountability Office directed USDA to clarify when feasibility studies are required and to train field staff to distinguish a properly completed feasibility study from a business plan. USDA's Office of Inspector General later faulted approvals that relied on missing or incomplete studies. In 2015 the Rural Development National Office reported that the overall quality of Community Facilities feasibility reports was less than desirable and that compilations were being erroneously accepted in place of a CPA examination opinion. The recurring defects are the same today: no study where one was required, incomplete studies, business plans presented as studies, financial analysis without the required attest-level opinion, and projections without stated assumptions or a stabilized horizon.

MMCG writes every study so that the State Office reviewer can check each Appendix A component, each assumption and each ratio without reconstruction. State Directors hold B&I approval authority of $5 million at the base level and up to $10 million at the maximum level under RD Instruction 1901-A; larger loans go to the National Office. Lenders can expect a response within 30 to 60 days of a complete application. The conditional commitment that follows fixes uses of funds, rates, terms, collateral, guarantors, a debt-to-net-worth maximum and a minimum debt service coverage ratio, and it must be accepted within 60 days.

MMCG USDA feasibility studies typically range from $8,000 to $16,000, depending on program, asset class, number of revenue streams and the scope the lender and Rural Development require. Single-purpose commercial facilities with straightforward operating models sit at the lower end. B&I projects with multiple revenue streams, integrated processing, cooperative structures or a REAP component sit at the higher end. Published 2025 and 2026 consultant pricing for USDA studies clusters between $10,000 and $30,000 with delivery of 3 to 12 weeks.

Every engagement receives a fixed-fee proposal. Payment terms are 50 percent at engagement and 50 percent on delivery. Standard delivery is 9 to 16 business days, with rush turnaround available from 5 days. Feasibility studies and business plans are an eligible use of B&I guaranteed loan funds under 5001.121(c)(10), so the fee can be financed in the loan. Every MMCG study carries a written acceptance guarantee: revisions required by the lender or by USDA are made at no additional cost.

MMCG studies are built on the same data infrastructure used by national lenders and institutional investors: commercial real estate market analytics and comparable property performance, hotel benchmarking, demographic and consumer expenditure data from the U.S. Census Bureau and ESRI, county-level labor and wage data from the Bureau of Labor Statistics, the USDA Census of Agriculture and Economic Research Service publications, industry financial benchmarks from the Risk Management Association and IBISWorld, mobility and foot traffic analytics, and site-level hazard screening for flood, wetland, wind and seismic exposure. Rural markets present thin data: few comparable businesses, sparse sub-county demographics and limited transaction evidence. MMCG addresses these constraints through MMCG Analytics, the national parcel, building and market data estate MMCG Invest built and operates, supplemented by state economic development reports, ACS five-year estimates and primary research. USDA reviewers reject studies built on unsupported assumptions, and the methodology is designed to withstand that scrutiny.

Hospitality carries the largest share of B&I dollars. Hotels, motels and resorts are eligible as tourist and recreation facilities, with owner-occupied quarters permitted only where their pro rata value is deducted from loan proceeds; see our hotel feasibility study page. RV parks and campgrounds operated as commercial enterprises are eligible, while residential trailer parks are not; see our USDA RV park and campground feasibility study page and our glamping and short-term rental feasibility study page. Fuel and travel centers are eligible commercial enterprises subject to the rule that no more than 15 percent of gross revenue may come from gambling, including gaming machine lease income; see our gas station feasibility study and truck stop feasibility study pages. Assisted living is eligible under B&I where constant medical care is available on site and under Community Facilities where the owner is a nonprofit or public body; see our USDA assisted living feasibility study page. Manufacturing and food processing, including meat processing, are the second largest B&I sector; see our industrial feasibility study page. Grocery and essential retail, car washes and self-storage are eligible commercial enterprises; see our retail, car wash and self-storage feasibility study pages. Apartments, independent living, golf courses, racetracks and timeshares are ineligible for B&I. Projects that may qualify for SBA financing as an alternative or complement are covered on our SBA feasibility study page, and our bankable feasibility study framework describes the methodology across every property type.

MMCG Invest is a national commercial real estate feasibility consultancy serving lenders, SBA Certified Development Companies, USDA guaranteed lenders and borrowers nationwide. Between January 1 and September 1, 2026, MMCG feasibility studies supported $2.3 billion of total construction cost and $1.7 billion of loan amount across more than 30 asset classes. Our conclusions reflect the data, not the desired outcome. Our studies are structured to the Appendix A scope, the lender checklist and the State Office review standard. We apply institutional methodology to rural markets where conventional data is thin, and we publish the free national hazard screening tools and the USDA eligibility map that lenders and borrowers use to check a site before engaging.

Engagement runs in four steps. First, a scoping call with the principal to confirm the program, the loan structure, the project cost and the lender's requirements. Second, a response within 12 business hours and a fixed-fee proposal with the engagement letter and a document request list. Third, research, site analysis and modeling, with a draft issued to the client and the lender for factual review. Fourth, delivery of the final study with the preparer's qualification statement and independence disclosure, followed by revisions required by the lender or USDA at no additional cost.

Michal Mohelsky, J.D. | Principal | MMCG Invest, LLC Contact: michal@mmcginvest.com Phone: (628) 225-1110

Michal Mohelsky, J.D., is the founder and principal of MMCG Invest, LLC. He has led feasibility studies supporting $2.3 billion of total construction cost and $1.7 billion of loan amount between January 1 and September 1, 2026 across more than 30 commercial real estate asset classes for national lenders, SBA Certified Development Companies, USDA guaranteed lenders and federal agencies. He holds a J.D. from Charles University Faculty of Law and is FMVA certified.

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 days. A senior analyst responds to proposal requests within 12 business hours from the firm's San Francisco office at 27 Maiden Lane, Suite 625.

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