Securing Project Feasibility Finance is about how to obtain money to build a business plan around your project and test its viability. The output is a plan that you can present to funders.
A feasibility study can cost anything between £5,000 and £50,000 depending on the complexity and scale of the business and how much you are able to do yourself.
With a simple property development, a study of the essentials is likely to be around £10,000 - £15,000. This should include a commissioned non-intrusive condition survey by a Chartered Surveyor (£2000 - £5,000) and the work of an architect to Stage C drawings (detailed concept, rather than a plan a builder can use). Depending on the likelihood of future fees the architect may undertake this element at risk, not charging a fee. This level of feasibility study will not be sufficient to convince a bank to lend you £1m+. More work would be needed to obtain financing of this size.
Feasibility funding is not easy to obtain. Funders prefer to finance a project that is already mapped out and has a high chance of completion. By their nature feasibility are speculative, making funders more wary.
There are a number of potential funding avenues to explore:
- Ask any professionals among your supporters if they can help.
- Try Business in the Community or similar agencies that broker in private sector support.
- Think about raising the cash from supporters (e.g. through a share issue)?
- Get in touch with Community Development Finance Institutions that can offer a mix of grants and loans.
- Trust funds may consider funding a feasibility study if it is presented as ‘trial marketing’ or a pilot.
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Futurebuilders (public services), the Adventure Capital Fund (asset based community enterprise) and the Social Enterprise Investment Fund (Health) all have money for completing feasibility studies.
- Local authorities, often through their area structures, may have the money to explore feasibility even if not for the project itself.
- Try the local Voluntary and Community Sector Organisation, or Housing Associations / Housing Market Renewal bodies
- If it’s high enough profile, go for feasibility funding from the big agencies: Regional Development Agencies, Homes and Communities, Arts Council
Obtaining finance for a feasibility study operates on the similar principles as securing finance for the project itself. There are numerous avenues to explore. Be persistent and do not give up if you are not immediately successful.
Try not to waste your time. Do not apply to funds that will not finance a feasibility study. Look at the criteria and make applications where your chances of success are highest.
Avoid narrow thinking. Opportunities may present themselves in unlikely places. Stay alert to opportunities and be creative. Make use of all your networks. Although you may not have the answer a friend, partner or colleague may do.
Futurebuilders
Adventure Capital Fund