By Bill Anderson, FCCA, Chief Executive Officer — Assetica, Dubai, UAE
Definition: A feasibility study is an independent assessment of whether a proposed venture or expansion is commercially viable: the market demand, the technical and licensing requirements, the financial case and the risks. In the UAE, banks expect one before lending to a new project, funds such as the Khalifa Fund and the Mohammed Bin Rashid Fund require one with funding applications, and some free zones request one with licence applications. Assetica builds studies to the standard a credit committee actually reads, on a three-statement financial model it can interrogate.
Bank finance and funding, where the study is the gateway document for a credit committee or fund. Market entry and licensing, testing demand, competition and pricing before the licence fees and fit-out are committed. The financial case, built as a three-statement model with realistic revenue build-up, break-even and the funding requirement, stress-tested under downside scenarios. And go or no-go decisions, because the most valuable study is sometimes the one that stops a project.
Market: demand, market size, target customers, competitors and realistic pricing in the specific emirate and sector. Technical: location, licensing pathway, facilities, staffing and the operating model. Financial: three-statement model, break-even, funding requirement and investor or lender returns. Risk: downside scenarios, sensitivity on the assumptions that matter, and the conditions under which the project fails.
Feasibility studies sit alongside Assetica’s financial modelling and bankable business plan services, and pair with a lender-ready business valuation where an existing business is expanding.
What is a feasibility study and when is it required in the UAE?
A feasibility study is an independent assessment of whether a proposed venture or expansion is commercially viable: the market demand, the technical and licensing requirements, the financial case and the risks. In the UAE it is commonly required by banks before lending to a new project, by funds such as the Khalifa Fund and the Mohammed Bin Rashid Fund with funding applications, by some free zones and regulators with licence applications, and by investors before committing capital.
What does a professional feasibility study include?
Four parts. A market study covering demand, competitors and realistic pricing in the specific emirate and sector. A technical review of location, licensing, facilities and staffing. A financial case built as a three-statement model with revenue build-up, break-even and the funding requirement. And a risk section with downside scenarios and sensitivities. The study is formatted for its audience, whether that is a credit committee, a fund or a board.
How is a feasibility study different from a business plan?
A business plan sells the venture; a feasibility study tests it. The study asks whether the project should proceed at all, on evidence: is the demand real, do the unit economics work, what breaks the case. Where the answer is yes, the study becomes the evidence base for the business plan and the funding application. Where it is no, it is the cheapest money the founder never spent.
Do UAE banks accept your feasibility studies?
The studies are built to the standard credit committees expect: conservative, evidenced assumptions, a three-statement model they can interrogate, break-even and downside cases, and a funding requirement that reconciles. Assetica is independent, we do not broke loans or take success fees on funding, which is precisely why the numbers carry weight with a lender.
How long does a feasibility study take and what does it cost?
A typical UAE feasibility study takes two to three weeks from the scoping call, depending on the depth of market research required. The fee depends on the sector and complexity; a focused SME study costs a fraction of the licence fees and fit-out it protects. The scoping call is free and carries no obligation.