Most rejected feasibility studies are not rejected because the project is weak. They are rejected because the study was written for the wrong reader. The founder writes to prove the idea is good; the credit analyst reads to answer one question: can this project service its debt in the worst case? Those are entirely different documents.
1. The number that gets read first
Long before reaching your market chapter, an analyst looks for the debt service coverage ratio — how many times annual operating cash flow covers the loan instalment. If that figure is not stated plainly in your executive summary, the analyst will calculate it, almost always on more conservative assumptions than yours.
The practical rule: put capital cost, funding sources, annual cash flow, payback period and debt service coverage on page one. Anyone who needs the detail will keep reading.
2. Assumptions matter more than outputs
An elegant financial model showing excellent returns means nothing if the origin of each number is unclear. Where did the selling price come from? The first-year utilisation rate? A convincing study ties every assumption to a source: a supplier quotation, a published tariff, a market average, or a comparable project.
An undocumented assumption is not optimism — it is where the rejection begins.
3. Year one does not run at full capacity
A common error is to model the plant or centre at full capacity from month one. In reality there is fit-out, recruitment, trial production and customer acquisition. A realistic study ramps capacity across the first two years and holds enough working capital to survive that period.
4. Sensitivity analysis is not decoration
The lender wants to see what happens if raw material costs rise, selling prices fall, or commissioning is delayed. Presenting three scenarios — conservative, base, optimistic — tells the reader you understand your own risks. Its absence suggests the opposite.
5. Regulatory requirements are part of feasibility
In industrial, food and healthcare projects especially, licensing is not an administrative detail to defer. Saudi Food and Drug Authority requirements, the industrial licence, civil defence conditions and local content rules each affect cost and timeline. A study that omits them reads as incomplete.
6. What weakens a file needlessly
- Copying market figures from global reports that do not describe the Saudi market
- Financial tables with no explanation of the methodology behind them
- Ignoring existing competitors, or dismissing them as low quality
- Overlooking working capital and focusing only on capital expenditure
- Mixing currencies or reference years without a clear basis
In short
A good study is not the longest one — it is the one its reader can decide from. Write it for the person who will read it, not the person who wrote it: sourced numbers, scenarios that acknowledge risk, and an executive summary that answers the repayment question on a single page.
Smart Mission · info@smartmission.sa
