USDA Feasibility Study Consultant

What a USDA feasibility study consultant does

This page covers USDA Rural Development's guaranteed loan programs specifically; the role in general is set out on our feasibility study consultant overview, and the SBA programs are covered on our SBA feasibility study consultant page. A USDA feasibility study consultant is the independent qualified consultant that 7 CFR 5001.3 describes: an independent third party with the knowledge, expertise and experience to evaluate the economic, market, technical, financial and management feasibility of a project seeking a USDA guarantee, and to say in writing whether it is expected to succeed. The consultant quantifies demand in a rural trade area, reviews the site, the technology and the cost, tests management, builds projections from the current financial statements through two years of stable operations, and stresses coverage under the Part 5001 definition. The study is filed by the lender as part of the guarantee application and reviewed by the Agency for acceptability, with its scope set by the Agency and dependent on the complexity of the project and the borrower. It is not an appraisal, carries no opinion of value, is not the lender's credit evaluation, and does not decide eligibility.

What a USDA feasibility study is

A USDA feasibility study is an independent, forward-looking analysis of whether a specific rural project can generate the cash flow required to service a USDA guaranteed loan, prepared to the components in Appendix A to Subpart D of 7 CFR Part 5001. It is commissioned when the credit decision cannot be made on operating history: a startup, an existing business that has not yet reached full operational capacity or stable operations, a ground-up facility, a new activity by an existing entity, or a project so large or so unfamiliar to the lender that the Agency wants outside expertise before it guarantees the loan. It quantifies demand from primary data, inventories competing supply, reviews the site and the technology, validates cost and management, builds an auditable projection model, and tests coverage under the definition Part 5001 actually uses. It is written for three readers at once: the lender's underwriter, whose credit evaluation under 7 CFR 5001.202 will cite it; the USDA reviewer, who decides under 7 CFR 5001.315 whether the loan is sound with a reasonable assurance of repayment; and, if it ever comes to that, the loss-claim examiner who will read the file years later.

It is not an appraisal and contains no opinion of value. It is not the lender's credit evaluation, which the lender must prepare itself. It is not the environmental review under 7 CFR 5001.207, although it reports the status of that review. For a renewable energy project it is not the technical report, although Part 5001 allows the technical report to sit inside the study's technical feasibility section. It is not a Community Facilities financial feasibility report with an examination opinion, which is an attestation engagement under AICPA standards and a separate deliverable. It informs a guarantee decision rather than making one, and it says so on page one.

What USDA's own data shows

Most consultants describe the USDA loan market from experience. We compute it. In January 2026 USDA Rural Development published Lender Lens, a loan-level view of its entire commercial guaranteed portfolio, refreshed monthly and downloadable to the individual loan: borrower name, lender, project state, close year, original amount, guarantee percentage, note rate, maturity, unpaid principal, the amount more than 90 days delinquent and the delinquency age bucket. Alongside it, the Rural Data Gateway publishes project-level investment records for the past ten fiscal years with borrower name, six-digit NAICS code, county and program. It is public, it is refreshed monthly, and almost nobody in the feasibility industry reads it. We maintain the full file and recompute our benchmarks on every release.

Headlines from USDA's own publications, current to the FY2027 budget explanatory notes and the OneRD funding page as of August 31, 2026:

Methodology and honesty notes: FY2024 and FY2025 obligation figures are from USDA's FY2027 budget explanatory notes for the Rural Business-Cooperative Service and the Rural Housing Service; loan counts are from the Office of Inspector General's audit of Rural Development's FY2025 financial statements, in a section OIG labels unaudited. The industry and state figures are from a program assessment prepared for a lender association and submitted to Congress, not a USDA publication, and are so labeled wherever we use them. Delinquency figures are USDA's own statements at a point in time. Lender Lens medians by sector and by state are computed by us from the monthly download and dated to the release; they change every month and are stated in your study with the release date attached.

Where the program stands in late 2026

Three things a borrower should know before commissioning a study this quarter, because each changes the file.

The FY2027 guarantee terms are not yet published. USDA's FY2026 notice at 91 FR 11272 appeared in March 2026 and applied from October 1, 2025. Expect the FY2027 notice to arrive late and apply retroactively. Until it does, the FY2026 terms govern: an 85 percent guarantee on B&I loans under $5 million and 80 percent from $5 million to $25 million, a 3.0 percent guarantee fee and a 0.55 percent annual retention fee; 80 percent, 1.25 percent and 0.50 percent for Community Facilities; 80 percent, 1.0 percent and 0.25 percent for REAP; and 90 percent with a 1.0 percent fee for Water and Waste Disposal. Congress had not enacted a full-year FY2027 agriculture appropriation by the end of September 2026, and the FY2027 budget request proposed ending new B&I lending while the House bill increased it, so program levels for the new fiscal year rest on a continuing resolution and remain contested.

USDA is tightening on repayment. The February 2026 letter to all lenders, the May 2026 lender removals and the delinquency figures above are the context for every guarantee application in the current cycle. The Agency's stated concerns are unsupported ramp-up periods, oversized loans, missing working capital analysis, offtake contracts that do not match the loan term, and reserves funded by the loan rather than the borrower. Each of those is something a feasibility study either substantiates or fails to.

USDA is reorganizing. In June 2026 Rural Development announced that its business and utilities loan and grant functions will be centralized in a Dallas-Fort Worth hub, with state and field offices retained for program delivery. Lenders still file through their Agency contact, but review may no longer happen in the state where the project sits. We write to the regulation and the Instruction, not to a particular reviewer's habits.

When Part 5001 requires a study

The rule is narrower than the folklore. A study is mandatory in three places.

Business and Industry. Under 7 CFR 5001.306(a)(3)(i), a guaranteed loan greater than $1,000,000 to a new business requires a feasibility study prepared by an independent qualified consultant acceptable to the Agency, with the scope determined by the Agency and dependent on the complexity of the project and the borrower. New business is defined in 7 CFR 5001.3 as a business in operation less than one full year, and also a business that has operated for a year or more but has not achieved full operational capacity or stable operations, including a new enterprise or new affiliate of an existing business moving or expanding into a new location involving new market or labor areas. That second clause catches more files than the first: an existing hotel operator building a second property, a processor adding a new line in a new county, a fuel retailer opening in a new market. At $1,000,000 or less the Agency may require a study, and it says specifically that it may do so where the project will significantly affect the operations and historic cash flow of an existing borrower.

Community Facilities. Under 7 CFR 5001.304, every CF guaranteed loan needs a financial feasibility report by a qualified firm or individual acceptable to the Agency. The lighter form, a financial feasibility analysis that the lender itself may prepare, is available for loans of $25 million or less to existing facilities, for loans secured by general obligation bonds or other tax-supported income, and for borrowers whose audited statements for the past three years show the ability to pay all debt. Everything else needs a financial feasibility study with an examination opinion under AICPA attestation standards, prepared by a firm carrying professional liability insurance. Separately, a CF loan above $1,000,000 to a new entity or an entity conducting a new activity requires an independent consultant's feasibility study. Assisted living and skilled nursing projections may assume no more than 90 percent occupancy.

Every program, at the Agency's discretion. Under 7 CFR 5001.303(c)(4), the Agency may require an independent feasibility study whenever it is unable to determine a basis for successful repayment from the documentation and analysis of the five feasibility components already in the file. Under 7 CFR 5001.315, it may require the lender to obtain outside expertise for complex financing or an unfamiliar industry.

Rural Energy for America Program. Under 7 CFR 5001.307, a feasibility study for a renewable energy system is required only when the lender or the Agency deems it necessary. A technical report is always required, scaled to project size: a simplified report at $80,000 or less, Appendix D for renewable energy systems between $80,000 and $200,000, and Appendix E at $200,000 or more, with an energy audit mandatory for efficiency projects at $200,000 or more. Where a study is commissioned, the technical report may sit inside its technical feasibility section.

Two further rules shape every engagement. Under 7 CFR 5001.208 the application must disclose conflicts of interest, which is why the consultant's independence is stated in the certification. And under 7 CFR 5001.121, a feasibility study completed and acceptable to the Agency is an eligible use of guaranteed loan funds unless it was financed by another Federal or State grant, so the cost can sit inside the loan.

The five components of a Part 5001 study

Appendix A to Subpart D of 7 CFR Part 5001 names the five components. Each is a finding, not a description, and the Agency reads them in this order.

Economic feasibility. The project's effect on the rural community: jobs created and retained, wages against the county median, the local supply chain, and the community's need for the facility. This is also where the inputs to the Agency's priority scoring live, because job and wage criteria and the loan's share of total project cost are scored under 7 CFR 5001.318.

Market feasibility. Demand quantified from primary data for the trade area the project will actually serve, competing supply physically inventoried, pricing tested against the market, and the customer base identified. In a rural market the trade area is often measured in drive time rather than miles, and the demand evidence is often thinner than in a metropolitan market, which is precisely why the Agency wants an independent party to build it.

Technical feasibility. Site suitability, access and utilities, the technology or process, the construction plan and schedule, the contractor's and engineer's qualifications, and the status of the environmental review under 7 CFR 5001.207. For processing and energy projects, the technical report Part 5001 separately requires is reconciled here.

Financial feasibility. The analysis Appendix A describes as the operation's ability to achieve sufficient income, credit and cash flow to financially sustain the project over the long term and meet all debt obligations, built on management's assumptions, the source of repayment, a peer industry comparison, and a sensitivity analysis. The projections run from the current financial statements through at least two years at full operational capacity or stable operations, as 7 CFR 5001.303(b)(4) requires, with the Agency able to extend the horizon to the end of the loan term.

Management feasibility. The sponsor's and the operating team's experience against the demands of the business, named managers, succession, and the governance structure. Where the operator is new to the industry, this section carries the weight, and the Agency knows it.

What the Agency looks for

USDA does not publish a reviewer's checklist for feasibility studies. It has, however, told lenders in writing what it is worried about. The Rural Business-Cooperative Service's February 2026 letter to all OneRD lenders is the clearest statement of Agency expectations in years, and we write every study to answer it.

Ramp-up periods must be justified with realistic monthly cash flow projections, with principal and interest beginning at the break-even month rather than at an arbitrary date. Loan sizing must align with industry norms, always supported by a working capital analysis. Offtake and supply contracts must be assessed for risk, with terms aligned to the loan where feasible. Reserves must be funded by the borrower. And any C-PACE assessment must carry an additional collateral discount and sit in full inside the debt service coverage calculation.

Behind that letter sits the regulation itself. Under 7 CFR 5001.202(b)(6)(iv), projections that deviate from historical performance must be substantiated and documented, and projected increases in revenue, margin or profitability must be reasonable. Under 5001.202(b)(6)(iii), the lender's spreads must compare the borrower's ratios with industry standards such as the Risk Management Association or Dun and Bradstreet. Under 5001.9(c), a tax return is not an acceptable financial statement for underwriting a guaranteed loan. A study that leans on the sponsor's spreadsheet, a national industry average and the last three tax returns has failed all three tests before the reviewer reaches the conclusion.

Coverage testing under Part 5001

USDA defines the ratio differently from SBA and from most banks, and the difference decides files. Under 7 CFR 5001.3, the debt service coverage ratio is earnings before interest, taxes, depreciation and amortization, less reasonably expected replacement capital expenditures, divided by the annual principal and interest payments of the borrower. The replacement capital deduction is in the definition. A business that shows 1.34x on an SBA-style EBITDA basis can show 1.09x under Part 5001 on the same cash flow if it replaces equipment on a cycle shorter than its loan, and every hotel, car wash, processor and RV park does.

What the regulation does not contain is a general minimum. There is no 1.25x in Part 5001. The only numeric coverage tests are in 7 CFR 5001.102(d)(4)(iii), which requires historical coverage of at least 1.1 times at the proposed debt service where refinancing is the majority purpose of the loan, or 1:1 on the current income statement where the borrower demonstrates it has recovered from past problems, and in 5001.102(d)(5), which applies the same 1.1 test to rural hospital refinancing with capital and debt reserves counted inside debt service. Everything else is the lender's own policy, which commonly sits at 1.20x to 1.25x and which we test against, but which belongs to the lender and not to the Agency.

What the regulation does contain is a set of rules of evidence around the number. Under 5001.202(a), applications involving affiliates must include a global credit evaluation and a global historical and projected coverage analysis, and applications with guarantors must include a global coverage analysis of the guarantors, including their cash flow. Under 5001.202(b)(6)(v) and (vi), seasonal borrowers require quarterly projected cash flow, and construction projects where the guarantee is requested before completion require quarterly cash flow from the current statements through start-up or occupancy. Under 5001.105(d), balance sheet equity at closing must be at least 10 percent for an existing business, 20 percent for a new business, and 25 percent for a new business under construction where the guarantee is requested before completion, with subordinated debt under a lifetime standstill counted as equity. Under 5001.202(b)(4), collateral is discounted to sound loan-to-discounted-value standards and the lender must justify the discounts it uses.

Our coverage exhibit for a USDA file therefore shows coverage under the Part 5001 definition and, alongside it, under the SBA definition where the project may go either way; a replacement capital schedule built from the fixed asset register; year-by-year coverage from the first operating period through two stable years, quarterly wherever seasonality or construction applies; global coverage on documented guarantor cash flow; and a sensitivity analysis that solves for the revenue decline and occupancy at which coverage reaches the lender's policy floor and 1.00x. Our article on the debt service coverage ratio for SBA and USDA loans works the arithmetic through three examples.

The application and review process

Only the lender applies. Under 7 CFR 5001.301, the lender files the application and related documents through its Agency contact, using Form RD 5001-1 and the lender agreement on Form RD 5001-2. Under 5001.302 the lender may first request a preliminary eligibility review, which produces written Agency comments that are advisory and are not a decision either way.

The application under 7 CFR 5001.303(b) contains the Agency form, the lender's credit evaluation conforming to 5001.202, the environmental information under 5001.207, the financial statements described above (a balance sheet and year-to-date income statement within 90 days, three years of history or all years of operation, projections through two stable years with assumptions and a pro forma closing balance sheet), a disclosure of any relationship with an Agency employee, and the lender's risk rating scale. Under 5001.303(c) it adds, as the deal requires, a draft loan agreement at $600,000 or more, appraisals, credit reports, the feasibility study, engineering and architectural reports, a business plan and technical reports. Under 5001.303(a) an incomplete application draws a written list of missing items; under 5001.303(d) any modification after acceptance is treated as a new application.

The Agency decides under 7 CFR 5001.315: eligibility, a reasonable assurance of repayment ability, sufficiency of collateral and equity, regulatory compliance and completion of the environmental review, and it guarantees only loans that are sound. Applications are funded in the order received unless requests exceed available funds, in which case they are ranked by priority score; feasibility is not itself a scored factor, but the study supplies the scored inputs on jobs, wages, the loan's share of project cost and, for REAP, simple payback. An approved application receives a Conditional Commitment on Form RD 5001-3, which the lender and borrower must accept within 60 days and which is effective for one year or long enough to complete the project. After closing and any construction, the Agency issues the Loan Note Guarantee on Form RD 5001-4. Purchases or construction started after application but before the Conditional Commitment are at the borrower's risk under 5001.315(f).

On timing, USDA's own historical guidance was a response within 30 to 60 days of a complete application, varying with complexity. That guidance predates the OneRD rule and the 2026 reorganization, and we do not promise it. What we can promise is that the study will not be the reason the application is incomplete.

Studies by USDA program

USDA Business and Industry feasibility study. The B&I guarantee is the workhorse: up to $25 million per borrower, terms of up to 30 years on real estate, 15 years on equipment and 7 years on working capital, fixed or variable rates, and an 85 percent guarantee below $5 million for FY2026. It finances the same asset classes SBA does, at two to six times the loan size, in communities of 50,000 or fewer. The study is mandatory above $1,000,000 for a new business as Part 5001 defines it, and the market feasibility section carries the weight, because rural demand evidence is thin and the Agency has watched projections fail. Our B&I studies are positioned in the Lender Lens file by sector, size and state, and every coverage figure is shown under the Part 5001 definition.

USDA Community Facilities feasibility study. CF guarantees finance essential community facilities owned by public bodies, nonprofits and tribes: hospitals, clinics, assisted living and skilled nursing, schools, public safety and civic buildings. Every CF guarantee needs a financial feasibility report, and most need an examination-level study under AICPA attestation standards. Healthcare files bring their own rules: a 90 percent occupancy ceiling on assisted living and nursing projections, and a 1.1x historical coverage test on rural hospital refinancing with capital and debt reserves inside debt service. We prepare the independent consultant's feasibility study Part 5001 requires above $1,000,000 for a new entity or new activity and coordinate with the CPA firm delivering the examination opinion where one is required.

USDA REAP feasibility study. REAP guaranteed loans cover up to 75 percent of eligible project cost for renewable energy systems and energy efficiency improvements by agricultural producers and rural small businesses, with an 80 percent guarantee for FY2026. A technical report is always required and a feasibility study only when the lender or Agency deems it necessary, which in practice means larger systems, unusual technologies and projects whose repayment depends on power sales or incentives. Grant awards under REAP are paused while USDA rewrites the program, and the FY2025 to FY2027 grant notice was rescinded in April 2026; guaranteed loans continue. Our REAP work is scoped to the guaranteed loan and the technical report, with incentives labeled recurring or one-time as 7 CFR 5001.307 requires.

USDA Section 538 market and feasibility work. Section 538 Guaranteed Rural Rental Housing is a separate program under 7 CFR Part 3565 with its own market study requirement and a lender certification of coverage of at least 1.15. On September 25, 2026 USDA published a two-part notice: a preservation pilot running from October 9, 2026 to September 25, 2028 that reduces the coverage test to 1.11 for the first 200 loans closed under it, and, outside the pilot, an increase in the Option 3 loan-to-cost limit from 70 to 80 percent. We prepare the market study and the coverage analysis for 538 files to those terms.

USDA feasibility studies by asset class

The classes below are where the B&I program's lending goes and where the Agency's feasibility scrutiny concentrates. Each paragraph states what the program's data shows, what Part 5001 does to the file, and what the study has to prove.

USDA feasibility study for a hotel. Accommodation and food services took 32 percent of core B&I obligations in FY2024 and nearly $4 billion over the preceding decade, the largest single sector in the program. A rural or small-town hotel financed under B&I is typically a franchised limited-service property of 60 to 120 rooms on a highway corridor or near a hospital, university, plant or destination, often at a loan size well above the SBA 7(a) ceiling. The study builds demand from the corridor's traffic counts, the identified demand generators and their visitation, the STR-class performance of the competitive set, and the seasonality curve of the specific market, because a hotel that runs 80 percent in summer and 40 percent in winter must be shown quarterly under 5001.202(b)(6)(v). Revenue is built by segment and the franchise FF&E reserve is deducted as replacement capital under the Part 5001 coverage definition, which is where a hotel's SBA-style 1.40x becomes a USDA-style 1.25x. The equity tier is stated at 20 or 25 percent for a new business, the environmental review status is reported, and the brand agreement, its term and its property improvement obligations are listed as conditions precedent.

USDA feasibility study for a manufacturing or food processing plant. Manufacturing took 18 percent of core B&I obligations in FY2024 and $2.3 billion over the decade, and it is the class where the market and technical sections do the most work. The study identifies the customers, tests offtake or supply contracts against the loan term as the Agency's February 2026 letter asks, verifies input availability and pricing, and reconciles the technical report that 7 CFR 5001.306(a)(3)(iii) requires for integrated processing equipment with the capacity and ramp-up assumptions in the model. Replacement capital is built from the equipment schedule and is often the largest single deduction in the coverage calculation. Working capital is sized explicitly, since the Agency has said it will no longer accept a loan sized without one. Jobs and wages, which drive the economic feasibility finding and the priority score, are built from a staffing plan rather than asserted.

USDA feasibility study for assisted living, skilled nursing or a rural hospital. Health care took 7 percent of B&I obligations in FY2024 and dominates Community Facilities lending. The study builds demand from the 75-plus and 85-plus population within the drive-time trade area, penetration and income qualification, existing and pipeline beds, and payer mix, and it respects the 90 percent occupancy ceiling on assisted living and nursing projections that 7 CFR 5001.304 imposes. For a hospital refinancing, coverage is shown on the historical basis with capital and debt reserves inside debt service, because that is the 1.1x test in 5001.102(d)(5). Where the credit runs through Community Facilities rather than B&I, the study is coordinated with the examination-level financial feasibility report the program requires.

USDA feasibility study for an RV park, campground or outdoor resort. RV parks in rural counties are frequently financed under B&I rather than SBA 504 because the loan size, the land-heavy budget and the location fit the program, and they are among the most seasonal assets USDA guarantees. The study builds demand from drive-time access to the metropolitan markets that supply guests, the destination anchor, regional RV registrations and the observed season at competing parks, and it shows cash flow quarterly because a park that covers 1.30x on an annual basis can fail to cover in two quarters of the year. Replacement capital for pedestals, roads and bathhouses is deducted under the Part 5001 definition. The working capital or seasonal line that carries the park through winter is sized from the cumulative cash trough and stated as a condition precedent.

USDA feasibility study for a gas station, truck stop or travel center. Rural fuel sites financed under B&I are typically larger than their SBA counterparts: travel centers on interstate interchanges, truck stops with diesel islands and restaurants, or branded stations with a car wash and quick-service food. The study builds fuel volume from state DOT counts on the interchange and the through-route, the site's position against the dominant direction of travel, and the pricing posture of every competing site in the drive radius, then models fuel margin from regional rack-to-retail history and stresses the loan against margin compression. Inside sales are built by category from comparable stores. Underground storage tank age, registration and any open remediation case are reported in the technical section because they bear on the environmental review under 5001.207 and on collateral discounts under 5001.202(b)(4). Fuel supply and brand agreements are listed as conditions precedent.

USDA feasibility study for a renewable energy or biogas project. Energy projects under B&I and REAP are where the technical report and the feasibility study meet. Utilities took 11 percent of B&I obligations in FY2024, and anaerobic digester loans have since drawn Agency scrutiny and a pause on new guarantees. The study reconciles the technical report's production estimate with the revenue model, labels every incentive as recurring or one-time as 5001.307 requires, tests the offtake or interconnection agreement against the loan term, and shows coverage without incentives as well as with them. Where the Agency exercises its discretion under 5001.105(d)(5)(i) to raise equity for renewable energy systems, the sources and uses page reflects it.

USDA feasibility study for self storage and RV and boat storage. Storage in rural counties shares the low operating cost and long lease-up of its metropolitan counterpart, with a thinner demand base and a longer drive-time trade area. The study computes existing and post-construction square feet per capita, builds rate from the competitive survey, models lease-up month by month over the 24 to 36 months a new facility takes to stabilize, and, because Part 5001 requires projections through two years of stable operations, runs the model well past the point at which most sponsor spreadsheets stop. Coverage during lease-up is the credit question, and the interest reserve or working capital that carries it is sized and stated.

SBA or USDA: which program should test the project

Many rural projects are eligible for both an SBA loan and a USDA guarantee, and the choice changes the credit test more than the sponsor expects. SBA is a numbers regime: 1.15x coverage on operating cash flow for a Standard 7(a) loan, 1.25x on historical earnings for most acquisitions under SOP 50 10 8.1, 10 to 20 percent equity, and a $5 million 7(a) ceiling. USDA is a standards regime: no general coverage minimum, a coverage definition that deducts replacement capital, projections through two stable years, quarterly cash flow for seasonal borrowers, tax returns excluded as financial statements, and a $25 million guaranteed loan limit. A project that clears SBA's floor comfortably can look thin under USDA's definition; a project too large for 7(a) may fit B&I. When the lender has not yet chosen, we write the coverage exhibit under both definitions so the file can go either way without a rewrite. The SBA side is set out on our SBA feasibility study consultant page, our SBA DSCR calculator tests it under both SOP versions, and our article on the debt service coverage ratio for SBA and USDA loans works through the differences with examples.

How the data enters your study

The loan file is the frame, not the study. Around it, every engagement builds the evidence the reviewer actually has to weigh:

Positioning. Your project's loan size, sector and state placed against the Lender Lens distribution for its program, dated to the monthly release, so that "reasonably scaled" is a computed statement rather than an adjective.

Base rates engaged. The program's delinquency record by sector, acknowledged and answered: what, specifically, places this project outside the pattern the Agency has been writing to lenders about.

Demand from primary data. A rural trade area defined by drive time and defended; demand built on the accepted method for the asset class from traffic counts, demographics, visitation records, registrations, contracts and a physically measured competitive inventory, with the arithmetic shown.

A model built for audit. Projections from the current financial statements through two years of stable operations and to the end of the loan term where the Agency asks, monthly through ramp-up and quarterly wherever seasonality or construction applies, no hardcoded value in any calculation cell, every input sourced, coverage tested under the Part 5001 definition and the lender's policy floor, operating and global, before and after replacement capital, under sensitivity and rate stress.

Conditions named. Whatever the deal still needs, an executed offtake contract, a franchise agreement, a permit, a named manager, the environmental determination, is listed with its curing document, which becomes the Conditional Commitment checklist.

The components of a USDA feasibility study

A study that survives the lender's credit committee, the Agency's review under 7 CFR 5001.315 and, if it comes to it, a loss claim years later is built from a fixed set of components. Each appears in every USDA feasibility study we deliver, in this order, with the arithmetic visible.

1. Executive conclusion. The finding on page one: feasible, feasible subject to named conditions, or not feasible as proposed. The projected operating and global coverage under the Part 5001 definition for each year through stable operations and across the loan term, stated against the lender's policy floor, and the three or four facts on which the conclusion turns.

2. Project description, sources and uses. The project as it will be financed: site, program, capacity, total project cost by line, the guaranteed loan, any other debt, and the borrower's balance sheet equity reconciled to the 7 CFR 5001.105 tier that applies. Eligible and ineligible uses of loan funds under 5001.121 and 5001.122 are identified.

3. Program positioning. Rural area eligibility under the 50,000 population test, the program the project fits and why, the FY2026 guarantee percentage and fees that apply, and the project's place in the Lender Lens distribution for its sector and state, with the release date.

4. Trade area definition. The geography from which the project will draw its customers, defined by drive time, traffic pattern, physical barriers and observed competitor draw, and defended in writing.

5. Market feasibility. Demand built on the accepted method for the asset class from primary data, shown as arithmetic, with pricing tested against the market and the customer base identified.

6. Competitive supply inventory. Every competing facility in the trade area, physically or remotely inspected, with capacity, rate, occupancy where observable, condition and pipeline.

7. Technical feasibility. Site, access, utilities, zoning and entitlement, the technology or process, the construction plan and schedule, the contractor's and engineer's qualifications, the status of the environmental review under 5001.207, and, for processing and energy projects, reconciliation with the technical report Part 5001 requires.

8. Cost validation. Hard cost, soft cost, equipment, working capital, contingency and interest reserve tested against third-party benchmarks and comparable projects, with working capital sized explicitly.

9. Management feasibility. The sponsor's and the operating team's experience against the demands of the business, named managers, and succession.

10. Economic feasibility. Jobs created and retained, wages against the county median, the community need, and the inputs to the priority score under 5001.318.

11. Financial projections. From the current financial statements through at least two years of stable operations and to the end of the loan term where required, monthly through ramp-up and quarterly wherever seasonality or construction applies, with no hardcoded value in any calculation cell, every assumption listed, and a replacement capital schedule built from the fixed asset register.

12. Debt service coverage testing. Coverage under the Part 5001 definition, year by year and quarter by quarter where required, operating and global, against the lender's policy floor and the regulation's own tests, with the SBA definition shown alongside where the project may go either way.

13. Sensitivity analysis. Single-variable sensitivities on volume, price, cost and interest rate, a combined downside case, a break-even analysis that solves for the revenue decline and occupancy at which coverage reaches the policy floor and 1.00x, and, where the file warrants it, a simulation reporting the probability that coverage falls below threshold in any year.

14. Conditions precedent. Every open item the conclusion depends on, listed with its curing document.

15. Certification, independence and sources appendix. The intended users named, the consultant's independence stated for the conflict-of-interest disclosure under 5001.208, the limits of the work, a plain statement that the study is not an appraisal and contains no opinion of value, and a sources appendix that lets any reviewer reproduce any number.

A note on coverage ratios

Some firms advertise that every USDA study proves 1.25x coverage. Part 5001 contains no such number. It contains a definition that deducts replacement capital expenditures before dividing by debt service, two 1.1x tests that apply only to refinancing, and a standard that the lender must structure the debt so that coverage is adequate. The 1.25x belongs to the lender's policy, and lender policies vary. A study that quotes a universal ratio has chosen the number that flatters it and, more often than not, has computed it under the SBA definition rather than the USDA one. We ask for the term sheet first, compute coverage under the definition the Agency will read, and show it year by year and quarter by quarter, before and after replacement capital, against the floor your file will actually be measured against.

What you receive

A complete analytical report organized around the five Part 5001 components: conclusion on page one, program positioning in USDA's own data, market and demand analysis with the arithmetic visible, competitive supply physically inventoried, technical and site review with environmental status, management and economic feasibility, full projections and stress battery under the Part 5001 coverage definition, itemized conditions precedent, sources appendix, and a certification stating independence and that the study is not an appraisal. Plus the fully linked model, and reviewer support through the Conditional Commitment and closing included in the fee: when the State Office or the Dallas-Fort Worth hub has a question in month three, we answer it. Standard delivery runs in business days from complete data; rush for files already with the Agency at a fixed add-on quoted up front.

The engagement

One. Send the project, program, lender and deadline. Fixed written fee within one business day, free, with the lender call if you want it.

Two. A document request tailored to the deal goes out day one: term sheet, budget and sources and uses, site plan, plans or contractor estimate, resumes, financial statements (not tax returns alone) where the business exists, contracts and offtake agreements, franchise or operating agreements, the technical report where one exists, and the environmental information the lender has assembled.

Three. Market, data positioning and technical analysis.

Four. Model, stress, reconciliation, and a check against Part 5001 and the lender's checklist before anything leaves the building.

Five. Delivery and reviewer support through the Conditional Commitment and closing.

Independence, and what this document is not

The fee is fixed before work begins, never a percentage of the project, never contingent on the finding, and a conclusion is never revised under pressure. The consultant is independent of the lender, the borrower and the project, and says so in the certification for the purposes of 7 CFR 5001.208. The study names its intended users and is written for them even when the borrower pays. It is not an appraisal, contains no opinion of value, is not prepared under USPAP, and cannot satisfy an appraisal requirement. It is not the lender's credit evaluation, not the environmental review, and not a Community Facilities financial feasibility report with an examination opinion. It does not determine eligibility, which rests with the lender and the Agency. It informs a guarantee decision rather than making one. All of this appears on page one of every study we sign.

Who prepares your study

FSC Consulting, Inc. is run by Sarrah Allen, MAI. Feasibility Study Consultant is a commercial real estate consulting practice specializing in independent, lender-facing feasibility studies for USDA and SBA guaranteed credits and conventionally financed projects. The team that writes our USDA studies is the team that maintains our data infrastructure, including the full Lender Lens and Rural Data Gateway files behind every figure on this page, the SBA loan-level file behind our SBA studies, a national parcel corpus, aerial imagery, traffic counts and CMBS property-level performance data. That is why our benchmarks are computed rather than described.