Five parts of a feasibility study that banks and investors check
A box-ticking feasibility study is easy to pick apart. These are the five parts it should have before you seek funding.
Banks and investors read a feasibility study to judge whether a project can pay back their money. A report written only to satisfy paperwork rarely survives their review.
1. A measured market
Demand, competitors and prices are backed by traceable data, not assumptions.
2. Technical and physical aspects
Land or building condition, investment needs and the build schedule are assessed realistically, including the risk of delay.
3. Legal and licensing aspects
Land title, zoning, business licences and sector rules are checked from the start. A financially sound project can still fail on permits.
4. Tested financial projections
Cash-flow projections come with sensitivity analysis and a worst case, such as falling occupancy or rising interest rates.
5. A mitigation plan
Every major risk has a clear response, from the financing structure to contract clauses.
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