A Valuation-Led Commercial Feasibility Study and Appraisal Firm
UnionMetric Appraisal & Feasibility prepares independent feasibility studies and USPAP-compliant commercial appraisals for lenders financing commercial real estate and operating businesses under SBA 7(a), SBA 504, USDA Rural Development guaranteed programs and conventional credit.
Our position is simple: a feasibility study that cannot be reconciled to a supportable value is not an underwriting document. Every conclusion we issue is built to withstand credit review, appraisal review and, where it applies, agency review.
Analyses in every study
Market, technical and site, financial, and management feasibility.
Approaches to value considered
Sales comparison, income capitalization and cost.
USDA feasibility headings addressed
Economic, market, technical, financial and management.
Loan programs served
SBA 7(a), SBA 504, USDA B&I, Community Facilities, REAP and conventional.
States served
Nationwide engagements, addressed to the lender.
Who Stands Behind Every Report
Every credit file begins with the same question: who is responsible for this work. At UnionMetric the answer is stated in each deliverable. Every report identifies the professional who developed the analysis and signed the conclusions, the credential and license under which the work was performed, the intended users and intended use, and the effective date of each conclusion.
Appraisal credentials are public record and can be confirmed independently. State licenses and certifications are listed in the National Registry maintained by the Appraisal Subcommittee of the Federal Financial Institutions Examination Council, which state appraiser boards update at least monthly. Appraisal Institute designations can be confirmed in the Institute's public directory. We encourage every lender to verify both before engagement.
Why We Treat Feasibility as a Valuation Question
The lending programs we serve do not ask whether a project is attractive. They ask two narrower questions: will the project generate enough cash to service its debt, and will the collateral hold its value if it does not. Both are valuation questions.
A revenue forecast that implies a stabilized value the market will not pay is a feasibility failure, however comfortable the projected coverage looks. So is a development budget that exceeds what the completed asset will be worth. A study that never tests its projections against market value leaves the credit officer to discover the gap at appraisal, usually after the commitment letter has been issued.
We therefore build feasibility studies on the same evidentiary foundation as an appraisal: market-derived rents and rates, verified comparable sales and operating data, supportable capitalization rates and an explicit highest and best use conclusion. Where an engagement includes an appraisal, the feasibility study and the valuation share one body of market evidence and one set of assumptions, so the credit file never carries two versions of the same project.
How We Value Feasibility
Our methodology follows the sequence a reviewing appraiser expects, applied to the question a credit officer needs answered.
Highest and Best Use
Every assignment begins with the four tests of highest and best use: legally permissible, physically possible, financially feasible and maximally productive. The proposed use is tested as though vacant and, where improvements exist, as improved. A project that fails the financially feasible test is reported as failing it.
Three Approaches to Value
The sales comparison, income capitalization and cost approaches are each considered, applied where the market supplies credible evidence and reconciled to a single conclusion. For income-producing and operating properties the income capitalization approach usually carries the greatest weight, so our feasibility projections are built to reconcile directly to it.
Premises of Value
Construction, expansion and repositioning loans need more than one value. We distinguish market value as is from prospective market value upon completion and upon stabilization, and we state the effective date, the absorption or ramp-up period and the assumptions behind each.
Going-Concern Allocation
Hotels, gas stations, car washes, assisted living communities and other operating properties trade and finance as businesses. SBA requires the total going-concern value to be allocated among real property, furniture, fixtures and equipment, and intangible assets, and USDA reviewers examine how much of the collateral value depends on the business rather than the real estate. We make that allocation explicit and support each component separately.
Debt Service and Break-Even
Stabilized revenue and expenses are built from market evidence, ramped through a documented lease-up or ramp-up period and tested against the actual loan terms: debt service coverage ratio, break-even occupancy or break-even volume, loan-to-value and loan-to-cost.
Sensitivity Testing
We measure how far revenue, rates, operating expenses and capitalization rates must move before the project stops covering its debt, so the margin of safety in the file is quantified rather than asserted.
Walk through each step in the Feasibility Study Methodology Navigator, or read our valuation methodology guide.
Four Analyses, One Reconciled Conclusion
A feasibility study is four analyses stacked on one another. Each has its own failure mode, and the conclusion is only as strong as the weakest of the four.
Market Feasibility
Who is in the trade area, how many of them, what they earn, how many are added or lost each year and what already competes for their spending. We build trade areas from parcel, block-group and traffic-count data rather than from radius rings drawn on a map, because a five-mile ring drawn across a river or an interstate describes a market that does not exist.
Technical and Site Feasibility
Whether the physical project actually fits: zoning and use permissions, setbacks and parking, access and turning movements, utility capacity, floodplain and wetlands, and the site-plan constraints specific to the asset class. A revenue forecast built on a bay count, room count or pad count the site cannot physically hold is worthless.
Financial Feasibility
Stabilized revenue and expense build-up, ramp assumptions, debt service coverage under the actual loan terms, break-even occupancy or volume, and sensitivity testing, reconciled to the income capitalization approach so the projections and the value tell the same story.
Management and Organizational Feasibility
Operator experience, staffing model, franchise or brand obligations, and whether the sponsor's team has run this asset type before. SBA and USDA reviewers weigh management capacity alongside the numbers, and so do we.
Quality Control, Technical Review and Independence
Independence is not a statement on a website. It is a set of controls that operate on every file.
Engaged by the Lender
Assignments are engaged by and addressed to the lender, the Certified Development Company or the agency. Federal banking rules require a fee appraiser to be engaged directly by the regulated institution or its agent, and SBA requires appraisals prepared for the lender, the CDC or SBA. Borrowers supply information; they do not direct conclusions.
Scope Fixed Before Fieldwork
Intended use, intended users, premises of value, effective dates and any extraordinary assumptions or hypothetical conditions are fixed in the engagement letter, not adjusted after the numbers come in.
Primary-Source Verification
Rents, rates, sales and operating data are confirmed with primary sources wherever possible, and any figure carried from a secondary source is identified as such in the report.
Technical Review Before Release
Every report is reviewed by a professional who did not prepare it, against the engagement scope, USPAP and the requirements of the applicable loan program.
Fees Independent of Outcome
Our fee is fixed at engagement. It does not depend on the value concluded, the loan amount or whether the credit is approved.
Workfile Discipline on Every Assignment
USPAP requires a workfile for every appraisal and appraisal review assignment, retained for at least five years after preparation or two years after final disposition of any judicial proceeding in which testimony was given, whichever period expires last. We apply the same retention to every feasibility assignment, including those that do not develop an opinion of value.
Competency Disclosed, Never Assumed
Where an asset class or a market falls outside our documented experience, we disclose it at engagement and state how competency will be acquired, or we decline the assignment, as the USPAP Competency Rule requires.
The Standards We Work Inside
Valuation and feasibility work for federally regulated and government-guaranteed lenders sits inside a defined compliance stack. Understanding that stack is part of what a lender is buying.
USPAP
The Uniform Standards of Professional Appraisal Practice are promulgated by the Appraisal Standards Board of The Appraisal Foundation, the body Title XI of FIRREA recognizes as the source of appraisal standards and appraiser qualification criteria. The current edition, the 2024 USPAP, took effect on January 1, 2024. Unlike the two-year editions that preceded it, it carries no scheduled expiration date, and it added a Nondiscrimination section to the ETHICS RULE.
USPAP comprises five Rules, the ETHICS RULE, RECORD KEEPING RULE, COMPETENCY RULE, SCOPE OF WORK RULE and JURISDICTIONAL EXCEPTION RULE, and ten Standards. Standards 1 and 2 govern the development and reporting of real property appraisals, Standards 3 and 4 appraisal review, Standards 5 and 6 mass appraisal, Standards 7 and 8 personal property appraisal, and Standards 9 and 10 business appraisal.
The former appraisal consulting Standards 4 and 5 were retired with the 2014-15 edition, and the term appraisal consulting was removed from USPAP. Today's Standards 3 and 4 are the appraisal review standards created when review was divided into development and reporting in the 2020-21 edition. Feasibility analysis performed by an appraiser therefore has no development and reporting standard of its own. It remains a valuation service within appraisal practice: the ETHICS RULE and COMPETENCY RULE apply to it in full, and once an assignment develops an opinion of value it is an appraisal, bringing the SCOPE OF WORK RULE, the RECORD KEEPING RULE and Standards 1 and 2 into force.
FIRREA Title XI and the Banking Agency Rules
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 requires appraisals for federally related transactions to be performed in writing, in accordance with USPAP, by state-licensed or state-certified appraisers. The banking agencies implement it at 12 CFR part 34, subpart C (OCC), 12 CFR part 225, subpart G (Federal Reserve) and 12 CFR part 323 (FDIC).
A state-certified appraiser is required for every federally related transaction of $1,000,000 or more, for commercial real estate transactions above $500,000 and for complex residential appraisals above $400,000. Commercial real estate transactions of $500,000 or less, residential transactions of $400,000 or less, and business loans of $1,000,000 or less that do not depend on the sale of, or rental income from, real estate for repayment are exempt from the appraisal requirement, but each still requires an evaluation consistent with safe and sound banking practices.
Transactions wholly or partially insured or guaranteed by a United States government agency are also exempt from the Title XI appraisal requirement. That exemption is often misread. For SBA and USDA guaranteed loans, appraisal requirements do not disappear; they move to the agency's own rules, which require USPAP-compliant appraisals and add requirements of their own, such as SBA's going-concern allocation.
Interagency Appraisal and Evaluation Guidelines
The Interagency Appraisal and Evaluation Guidelines, published December 10, 2010 at 75 FR 77450, expect the collateral valuation function to be independent of loan production, place the selection and engagement of the appraiser with the institution rather than the borrower, and expect each appraisal or evaluation to be reviewed for compliance and reasonableness before the final credit decision.
SBA 7(a) and 504
SBA's lending standards are set by Standard Operating Procedure 50 10, now SOP 50 10 8.1, effective October 1, 2026. Under 13 CFR 120.160(b), SBA may require professional appraisals, a survey or a feasibility study. Lenders and SBA most often require an independent study for start-up businesses, special-purpose properties and construction projects whose repayment depends on projections.
SBA appraisals are prepared for and addressed to the lender, the CDC or SBA, delivered as full appraisal reports rather than restricted appraisal reports, and, where the collateral is a going concern, allocate value among land, building, equipment and intangible assets. Under SOP 50 10 8.1, a business acquisition with a purchase price of $3 million or more also requires a Quality of Earnings report, which makes the appraiser's allocation a direct input into which reports a file needs.
In the 504 program, 13 CFR 120.910 sets the borrower contribution at a minimum of 10 percent of project cost, 15 percent for a business operating two years or less or for a limited or single-purpose building, and 20 percent when both conditions apply. Whether a building is limited or single purpose is therefore a property question with a direct effect on the borrower's equity, and the appraisal is where it is documented.
USDA Rural Development
The OneRD Guaranteed Loan Program at 7 CFR part 5001, published July 14, 2020 at 85 FR 42494 and effective October 1, 2020, unified the guaranteed Business and Industry, Community Facilities, Rural Energy for America and Water and Waste Disposal programs under one regulation, with amendments effective December 10, 2021 and November 29, 2024. Guaranteed loans serve rural areas, defined as any area other than a city or town of more than 50,000 inhabitants and its contiguous and adjacent urbanized area.
A feasibility study prepared by a qualified independent consultant is required for start-up businesses and may be required by the Agency in other cases. It must address economic, market, technical, financial and management feasibility, and appraisals in these programs must conform to USPAP. We structure every USDA study section by section against those five headings so a state office reviewer can locate each one without searching.
Appraiser Qualification
The Appraiser Qualifications Board of The Appraisal Foundation sets the minimum criteria states apply to each credential level. A Certified General Real Property Appraiser, the credential that permits the appraisal of all types of real property, must hold a bachelor's degree or higher, complete 300 hours of qualifying education and document 3,000 hours of experience obtained over no fewer than 18 months, at least 1,500 of them in non-residential work. Appraisal Institute designations such as MAI and AI-GRS sit on top of state certification and require advanced education, a comprehensive examination and documented, reviewed experience.
Key Figures Lenders Ask About
The thresholds and requirements that most often decide what a credit file needs, in one place.
Commercial real estate appraisal threshold
At or below this transaction value, a federally regulated lender may rely on an evaluation instead of an appraisal. In effect since April 9, 2018.
Business loan exemption
Business loans at or below this amount are exempt from the appraisal requirement when repayment does not depend on the sale of, or rental income from, real estate. An evaluation is still required.
State-certified appraiser required
Every federally related transaction at or above this value requires a state-certified appraiser, as do commercial real estate transactions above $500,000.
Residential appraisal threshold
Raised in 2019. Complex residential appraisals above this value require a state-certified appraiser.
Government-guaranteed loans under Title XI
SBA and USDA guaranteed transactions are exempt from the banking agency appraisal rule. The agency rules set the appraisal standard instead.
Certified General experience
Obtained over at least 18 months, with 1,500 non-residential, plus 300 hours of qualifying education and a bachelor's degree.
USPAP workfile retention
Or two years after final disposition of a judicial proceeding with testimony, whichever expires last.
Current USPAP edition
Effective January 1, 2024, with no scheduled expiration. The appraisal consulting Standards were retired in the 2014-15 edition.
SBA 504 borrower contribution
Standard project; start-up business or limited or single-purpose building; both conditions.
SOP 50 10 8.1 Quality of Earnings line
Business acquisitions at or above this purchase price require a Quality of Earnings report alongside the valuation.
USDA rural population line
Cities and towns above this size, with their adjacent urbanized areas, fall outside OneRD guaranteed eligibility.
OneRD effective date
One regulation for Business and Industry, Community Facilities, REAP and Water and Waste Disposal guarantees.
Research, Tools and Data
Our published work is an extension of our methodology. Lenders and sponsors use it to test a project before a study is commissioned, and reviewers use it to understand how our conclusions are built.
Feasibility Study Methodology Navigator
An interactive guide to the analyses, tests and evidence a lender-grade feasibility study should contain.
SBA Acquisition Report Stack Planner
Shows which reports a change-of-ownership file needs under SOP 50 10 8.1, from business valuation and going-concern appraisal to Quality of Earnings and feasibility.
7 CFR Part 5001 Handbook
A section-by-section guide to the OneRD guaranteed loan regulation for lenders and borrowers.
SBA Feasibility Study
SBA program requirements alongside our analysis of loan-level SBA FOIA data, including a seasoned 7(a) cohort from fiscal years 2010 through 2019.
USDA Feasibility Study
OneRD requirements with our computed series on Business and Industry guaranteed obligations by fiscal year.
UnionMetric Insights
Methodology, valuation and program analysis for SBA and USDA credit.
Built for the People Who Review the File
Our studies are written for their actual readers: SBA underwriters, CDC loan officers, USDA state office reviewers and bank credit committees. Each section is organized so a reviewer can find the evidence behind a conclusion without reading the report twice. Representative assignments, by loan program, asset class and state, are documented in our selected engagements and case studies.
Frequently Asked Questions
An appraisal develops an opinion of value for a defined property interest as of a specific date. A feasibility study tests whether a proposed project can be built, leased or operated, and financed on the proposed terms: market demand, site capacity, projected cash flow, debt service coverage and management capacity. Lenders often need both, and the two are most reliable when they share one body of market evidence and one set of assumptions.
When an appraiser performs a feasibility study, it is a valuation service within appraisal practice, so the USPAP ETHICS RULE and COMPETENCY RULE apply. The appraisal consulting Standards that once governed such work were retired in the 2014-15 edition. If the assignment develops an opinion of value, it is an appraisal, and the SCOPE OF WORK RULE, RECORD KEEPING RULE and Standards 1 and 2 apply in full.
Transactions wholly or partially guaranteed by a United States government agency are exempt from the banking agencies' Title XI appraisal requirement. The appraisal requirement then comes from the guaranteeing agency. SBA and USDA both require USPAP-compliant appraisals under their own rules and thresholds, and SBA adds going-concern allocation requirements for operating businesses.
The regulation is permissive: under 13 CFR 120.160(b), SBA may require a feasibility study. In practice lenders and SBA most often call for one on start-up businesses, special-purpose properties and construction projects whose repayment depends on projections rather than operating history.
Under the OneRD guaranteed loan regulation at 7 CFR part 5001, a feasibility study prepared by a qualified independent consultant addresses economic, market, technical, financial and management feasibility. It is required for start-up businesses and may be required by the Agency in other cases.
Operating properties such as hotels, gas stations and car washes sell as businesses. A going-concern appraisal estimates the value of the whole operation and then allocates it among land and building, furniture, fixtures and equipment, and intangible assets. SBA requires that allocation, and it determines how much of the value can serve as real estate collateral.
As is value reflects the property in its condition on the effective date. Prospective value upon completion assumes the planned improvements are finished. Prospective value upon stabilization assumes the property has also reached stabilized occupancy and income. Construction and repositioning loans commonly rely on all three.
State licenses and certifications can be searched in the ASC National Registry, which state appraiser boards update at least monthly. Appraisal Institute designations such as MAI and AI-GRS can be confirmed in the Appraisal Institute directory. A lender should verify both before engagement and confirm that the credential covers the state where the property is located.
Federally regulated lenders may use an evaluation for commercial real estate transactions of $500,000 or less, residential transactions of $400,000 or less and qualifying business loans of $1,000,000 or less. An evaluation must still be consistent with safe and sound banking practices, and the lender may require a full appraisal whenever the credit warrants it.
We build stabilized revenue and expenses from market evidence, ramp them through a documented lease-up period and test them against the actual loan terms: debt service coverage ratio, break-even occupancy or volume, loan-to-value and loan-to-cost. Sensitivity testing then shows how far revenue, rates, expenses and capitalization rates can move before coverage fails.
Bring Us Your Next Credit File
Tell us about the project, the loan program and the lender. You will receive a written proposal with scope, timeline and fee, addressed so the engagement satisfies program independence requirements.