Taking A Closer Look at Feasibility Studies: Understanding Third Party Reports with North Avenue Capital.
The USDA Rural Development Program requires specific third party documentation to be attached in the final application submitted to the USDA. At North Avenue Capital (NAC), we are dedicated to helping current and potential borrowers understand exactly what is needed and how to get to the closing table efficiently and accurately.
In this guide, we break down the types of third party reports your business must complete to be eligible for a USDA B&I Loan, specifically focusing on Feasibility Studies.
TABLE OF CONTENTS
- Understanding Third Party Reports with North Avenue Capital
- Applying for Your USDA B&I Loan: What Are Feasibility Studies?
- Breaking Down the Types of Feasibility Studies
- Get in Touch With North Avenue Capital Today
Understanding Third-Party Reports with North Avenue Capital:
To qualify for a USDA B&I loan, there are three different types of third party reports your business must undergo first. They include:
- Appraisal Reports
- Environmental Reports
- Feasibility Reports
Applying for Your USDA B&I Loan: What Are Feasibility Studies?
Feasibility Studies take a look at the practicality of the business plan, projections, management and much more. North Avenue Capital helps borrowers engage third parties to objectively asses and uncover the strengths and weaknesses of the business plan. We advise all businesses to complete a feasibility study to learn more about their competition, market, pricing, audience, and more. These reports are completed by a third party firm and typically take three to four weeks to complete.
Reminder: Feasibility studies are only required for a new business/startup.
Breaking Down the Types of Feasibility Studies:
The USDA requires a business to assess five areas of project feasibility. Those areas include:
- Management Feasibility: Your business must be able to show it can properly and efficiently run a business with your businesses’ leadership team.
- Technical Feasibility: If there is any specific technology that is associated with your business, you must prove your staff can operate those tools efficiently, effectively, and your plans are sound. This process involves interviews with staff, leadership, and manufacturers.
- Economic Feasibility: This study assesses whether your business can reach the margins you believe you can achieve.
- Market Feasibility: This study assesses how well your business will perform in the market you are based in. For example, will customers buy the product you are selling or will there be local/ regional support for your business.
- Financial Feasibility: Assess whether the profit of your business is worth what you are spending to keep it operating.
Get in Touch With Us Today
North Avenue Capital encourages you to get in touch with one of our loan specialists before you begin the process of completing your third-party reports.
NAC is ready to help you learn more about how to fund your next project today! To get in touch today, we encourage you to fill out the attached form HERE.
