Market Feasibility Studies
Why use Peak for a market feasibility study?
Peak Business Valuation specializes in providing Small Business Administration (SBA) and United States Department of Agriculture (USDA) feasibility studies. Our studies comply with SBA 7(a), SBA 504 loan program, and lender requirements. We have successfully supported numerous SBA loan requests.
Why do SBA lenders order feasibility studies?
SBA lenders order feasibility studies to assess the viability and potential profitability of a proposed project or investment opportunity. They do this before providing funding. Feasibility studies provide an in-depth analysis of the project. They include technical, economic, financial, and legal aspects. In addition, the study assesses the risks and benefits associated with the project. It also examines the market demand and determines the expected returns on investment. Through a feasibility study, SBA lenders determine if a proposed project is worth investing in. In addition, they decide if the potential returns justify the level of risk involved. The study also helps identify potential challenges or issues that may arise during the project’s implementation. The bank can then develop strategies to mitigate them. Ultimately, ordering a feasibility study helps banks minimize their financial risk. It ensures they invest in projects that are likely to generate positive returns. As well as invest in projects that are feasible to execute.
Why are Peak Business Valuation’s feasibility studies SBA or USDA-compliant?
An SBA or USDA-compliant feasibility study must meet organization requirements. The SBA and the USDA provide guidelines to ensure a feasibility study is eligible for financing under their programs.
A compliant SBA or USDA feasibility study includes the following elements:
Executive Summary:
A summary of the project’s objectives and scope. In addition, the expected outcomes of the project.
Market Analysis:
An analysis of the market demand, competition, and potential customers.
Technical Analysis:
A technical analysis of the proposed project. Including the equipment, materials, and labor required.
Financial Analysis:
A financial analysis of the project. Including cash flow projections, income statements, and balance sheets.
Management Analysis:
A management analysis of the proposed project. It includes the qualifications and experience of the management team.
Environmental Analysis:
An analysis of the project’s potential environmental impact. Including any permits or regulations to obtain or comply with..
Risk Analysis:
An assessment and plan to mitigate the potential risks and challenges associated with the project.
A qualified consultant with industry experience, such as Peak Business Valuation, must prepare a feasibility study. The study must comply with SBA or USDA guidelines. It also must prove the proposed project is feasible and environmentally viable. In addition, it must show that the project will generate positive returns.
The feasibility study must meet specific guidelines to be SBA or USDA-compliant. It also must include a comprehensive analysis of the project’s technical, financial, market, management, environmental, and risk factors. Peak Business Valuation provides feasibility studies for lenders across the country. To learn more, click the link below.
What type of SBA and USDA loans require a feasibility study?
The SBA and the USDA require feasibility studies for certain types of loans. Specific loan programs that require a feasibility study vary. It depends on the agency and the loan program.
For the SBA, the following loan programs typically require a feasibility study:
7(a) Loan Program: This program provides loans to small businesses for working capital, equipment purchases, and real estate acquisitions. It requires a feasibility study for projects with a total cost of $1 million+. Peak Business Valuation commonly provides SBA business valuations and feasibility studies for this type of SBA financing.
504 Loan Program: This program provides long-term, fixed-rate financing for fixed-asset acquisitions, such as real estate and equipment. It requires a feasibility study for projects with a total cost of $1 million+.
Community Advantage Loan Program: This program provides loans to small businesses in underserved communities. It may require a feasibility study for particular projects. These depend on the lender’s underwriting requirements.
What is typically included in a quality of earnings analysis?
A quality of earnings report provides an in-depth look at a company’s financial health and performance. This report is useful for investors, analysts, and financial professionals who want to understand a company’s financial situation better.
In other words, a quality of earnings report provides a detailed overview of your business’s financial performance during a specific time period. The report focuses on several key aspects of your business, including:
Normalized EBITDA:
This refers to the earnings before interest, taxes, depreciation, and amortization. The report highlights any add-backs needed to bridge the gap between reported EBITDA and adjusted EBITDA.
Fluctuations in financial information:
The report analyzes any annual or monthly fluctuations in your financial data, helping you to identify any trends or potential issues.
Revenue and gross margin:
The report breaks down your revenue and gross margin by product, customer, or distribution segments, providing insight into which areas of your business are performing well and which may need improvement.
Operating expenses and employee analysis:
The report examines your operating expenses and provides an analysis of your team. This can help you understand how these factors are impacting your business’s financial health.
Key balance sheet highlights:
The report provides a summary of your key balance sheet items, such as assets, liabilities, and equity.
Normalized working capital:
The report calculates the normalized levels of working capital needed to operate your business. A quality of earnings analysis helps you to understand your liquidity needs and plan for future growth.
By highlighting these key aspects of your business, the Quality of Earnings report can help you make informed decisions about the financial health and future direction of your company.
A quality of earnings analysis report includes the above information. If you plan on buying a business, a quality of earnings analysis is very beneficial. To learn more, reach out to Peak Business Valuation, quality of earnings advisors. Start by calling 435-359-2684 or by clicking the link below.
How long does it take to do a feasibility study for SBA and USDA loans?
The duration of a feasibility study for SBA and USDA loans can vary depending on the complexity and size of the project. Generally, a feasibility study can take several weeks to a few months to complete. The process involves a detailed analysis of the project’s technical, financial, market, management, environmental, and risk factors. This analysis requires gathering and analyzing data. It also requires conducting interviews with key stakeholders. Lastly, it requires preparing a comprehensive report. Additionally, a qualified consultant with industry experience, such as Peak Business Valuation, must perform the feasibility study. It must also meet the specific guidelines set by the SBA or USDA. The timeline for a feasibility study also depends on information and data availability. Also, the responsiveness of stakeholders may affect the timeline. Additionally, the speed of the consultant preparing the report influences time. The feasibility study process should start well before the loan application deadline. This ensures the completion of the study in time to meet the SBA or USDA’s requirements. During a free consultation, Peak Business Valuation will discuss your need for a feasibility study and the timeframe.
What documents does Peak Business Valuation need to perform an SBA and USDA feasibility study?
Performing a feasibility study for SBA and USDA loans requires several documents and information. Providing documentation helps Peak Business Valuation understand the project’s scope, goals, and potential challenges. It can also help provide data to conduct the analysis. The following are some of the documents and information typically needed to perform a feasibility study for SBA and USDA loans. Peak Business Valuation will request these documents and more when conducting a feasibility study.
Project Description:
A detailed description of the project. Including its objectives, scope, and location.
Business Plan:
A comprehensive business plan. It should outline the project’s goals, strategies, and financial projections.
Financial Information:
Financial statements for the past three years. This includes income statements, balance sheets, and cash flow statements.
Market Information:
Information about the management team, including their qualifications and experience.
Technical Information:
Technical specifications of equipment and materials. In addition, the labor required for the project.
Management Information:
Information about the management team, including their qualifications and experience.
Environmental Information:
Information about the project’s potential environmental impact. Including permits or regulations to obtain or comply with.
Risk Information:
Information about potential risks and challenges associated with the project.
A qualified consultant with experience conducting feasibility studies is essential for SBA and USDA loans. Peak Business Valuation uses all necessary documents and information to prepare a comprehensive report. This report meets all SBA and USDA guidelines. A market feasibility study will also determine the feasibility of the project and potential return.
Does Peak Business Valuation provide short-form feasibility studies for USDA and SBA Loans?
Yes, there are short-form feasibility studies available for USDA and SBA loans. Smaller or less complex projects typically use these studies. They provide a base analysis of the project’s feasibility in a shorter time than a full-scale feasibility study.
Short-form feasibility studies for USDA loans are also known as “pre-feasibility studies.” They typically involve a preliminary technical, market, and financial analysis. The pre-feasibility study assists borrowers in deciding whether to proceed with a full-scale feasibility study. A short-form feasibility study is often called a “mini-plan” or “lean plan” for SBA Loans. They provide a condensed version of a traditional business plan. The study includes a brief analysis of the market, management team, financial projections, and risk factors. Short-form feasibility studies may be sufficient for smaller or less complex projects. Larger or more complex projects may require a full-scale feasibility study to meet the SBA or USDA requirements. Peak Business Valuation is a qualified consultant with experience conducting feasibility studies for SBA and USDA loans. We ensure the study will meet guidelines. In addition, we provide a thorough and accurate analysis of the project’s feasibility.
How much are SBA and USDA loan feasibility studies?
The cost of a feasibility study for SBA and USDA loans varies depending on several factors. The project’s size, complexity, and the specific requirements of the SBA and USDA guidelines, to name a few. Some consultants charge a flat fee for their services. Others may charge an hourly rate or a combination of both flat and hourly. Typically, a full-scale feasibility study for SBA and USDA loans ranges from $5,000 to $25,000+. The cost depends on the project’s scope and complexity. Short-form feasibility studies, such as pre-feasibility studies or mini-plans, may be less expensive. These range from $1,500 to $5,000. The cost of the feasibility study is often a fraction of the total project cost. A well-executed feasibility study helps ensure the project’s success. It also reduces the risk of financial loss. A qualified consultant who regularly conducts feasibility studies for SBA and USDA loans ensures compliance with guidelines. In addition, they can provide a thorough and accurate analysis of the project’s feasibility. The consultant can provide a detailed cost estimate based on the specific requirements of the project and the SBA and USDA guidelines. Peak Business Valuation is an expert at providing feasibility studies for SBA and USDA loans. We are happy to answer any questions you may have.
Frequently Asked Questions
How much does a feasibility study cost?
The cost of a feasibility study varies depending on the project’s scope. To receive a quote for your specific project, please contact us for a written estimate. Reach out to Peak Business Valuation by calling 435-359-2684.
What is the typical timeframe for completing a feasibility study?
Generally, a feasibility study takes two to three weeks to complete. However, we accept rush orders for an additional fee.
Which locations does Peak Business Valuation cover?
We have experience serving all 50 states and territories within the United States. Peak Business Valuation works with more the 80 SBA lenders across the country.
How can I order a feasibility study?
To order a feasibility study, please call us at 435-359-2684. We need a project summary, company name, address, and your lender’s contact information.
Will a feasibility study guarantee loan approval?
A feasibility study is important in the loan underwriting process, but a lender has specific criteria to meet before approval. Experts recommend including a feasibility study with your loan application. Keep in mind some lenders prefer to order their own feasibility study. You can provide our contact information to your lender for this purpose. If you are needing a feasibility study for an SBA loan or USDA loan reach out to Peak Business Valuation. We are qualified consultants and experts in market feasibility studies. Schedule your free consultation today to get started!
