What is a Feasibility Report (Evaluation) ?

Spear Consultants, Ltd is a consulting firm assisting clients and prospects through the complex process of financing and refinancing income-producing projects.  With over fifty years experience and over six hundred feasibility studies, our independent reports are customized to client needs and based on relevant market facts, informed judgment and common sense.   Our firm’s primary effort is a Feasibility Report to determine if it is feasible to finance a income-producing project in a given area and by what means: conventional, private, or public funding.

Spear Consultants’ Feasibility Reports details how the proposed project will be funded and if future projections are capable of supporting debt. This report identifies the profitable opportunities and known facts of a given project.  Our assignment and resulting report goes beyond the study of demographics and financial projections because we “customize” our report to meet client needs.

Feasibility Report determines and addresses:

  • will the project structure meet the goals of the client
  • the type and positioning of project that yields greatest potential
  • should the project be public, private or a resort
  • is their sufficient demand to support this project
  • management abilities and experience
  • an assessment of existing and proposed marketing activities
  • actual and projected costs to build, buy or renovate
  • projected income from it’s use and related on-site sales
  • projected expenses for buildings, maintenance and administration
  • is there sufficient cash flow to service debt and/or investor’s return
  • when does revenue stabilization occur
  • an acceptable debt to coverage ratio
  • certain assumptions realistic and attainable
  • different analysis’ address “what if” scenarios
  • revisions, if needed, will be completed at no charge
  • present or future ownership and proposed lender
  • assistance of owner with introduction to lenders and approval process

The purpose of an Evaluation (Feasibility Report) is to establish a concise written report that summarizes the operational and financial opportunities’ of a  project.  It should identify market, demand, costs, income, expenses, profitability, structure, physical aspects, and risks and rewards of a project based investment and ownership. An independent report created by an independent and objective industry professional, adds credence and credibility to the client and project.  As such, Spear Consultants reports are prepared for the specific purpose of determining values to share with potential investors and lenders.

Investors want to know the What, Where, When and How of an investment or loan.  What is the investment and Where is it located?  When do clients receive benefits, does it support debt and over What term. The What and Where you already know, but the When is based on your timetable.  The most difficult of these to explain is the How.  Spear Consultants will determine: How this project or loan provides a return, service debt and can be self-supporting.

The cost of our services varies depending on research information available by client and is completed over several weeks.  Some clients know exactly what they need and appreciate Spear Consultants efforts and costs associated.  However, in the current economic climate and uncertain future, clients need to first get a practical understanding of what is a Spear Feasibility Report, and if a funding source is realistic.  In this situation Spear Consultants offers our expertise through a “Visitation and Review” assignment.