By Sharda Associates | CA Firm, Bhopal
You are applying for a business loan under PMEGP, CGTMSE, NABARD, or a standard bank term loan. The bank officer or the scheme portal says please submit a Feasibility Report covering all types of feasibility.
You know you need a document. But you do not know what types of feasibility exist, what each type covers, or why the bank needs all of them before approving your loan.
This guide explains every type of feasibility study in simple, plain language what each type covers, why banks require it, and what happens when any type is missing or superficially covered.
At Sharda Associates, a qualified CA firm based in Bhopal, Madhya Pradesh, we prepare CA-certified feasibility reports for bank loan applications across India. Our CA team has helped over 45,500 businesses prepare complete feasibility documentation accepted by SBI, PNB, Bank of Baroda, and all major banks and government scheme portals. We prepare every type of feasibility correctly giving your loan application the strongest possible foundation for approval.
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What is a feasibility study?
A feasibility study is a structured, comprehensive analysis that evaluates whether a proposed business project is viable before you invest your money and before the bank invests its lending capital in your project.
A feasibility study is different from a project report. A project report is your business plan it explains how your business will operate. A Feasibility Report is a pre-investment analysis it evaluates whether your business should proceed at all based on a thorough examination of all viability factors.
For most government scheme loans PMEGP, CGTMSE, NABARD, and Stand Up India both a Project Report and a Feasibility Report are required together. Every financial figure in the Feasibility Report must match exactly with the corresponding figure in the Project Report.
How Many Types of Feasibility Study Are There
A complete feasibility report for a bank loan application in India covers 5 main types of feasibility. Every bank and government scheme portal that requires a Feasibility Report expects all 5 types to be covered completely. Missing any one type — or covering it superficially — results in the bank returning the file before appraisal begins.
The 5 types are Technical Feasibility, Economic Feasibility, Operational Feasibility, Scheduling Feasibility, and Legal Feasibility.
Some larger or more complex projects may also require additional analysis types Market Feasibility, Environmental Feasibility, and Social Feasibility as standalone sections within the report. These are covered later in this guide.
Type 1 — Technical Feasibility
Technical feasibility is the first and most foundational type of feasibility analysis. It evaluates whether your project can actually be built, set up, and operated using available technology, machinery, raw materials, and infrastructure — at the scale and in the location you have proposed.
What Technical Feasibility Covers
Technology and Process Assessment covers whether the production process or service delivery method you have chosen is commercially proven and established. Banks do not want to finance experimental or unproven technology. Your technical feasibility must confirm that the technology you are using is already working successfully in comparable businesses — not being tried for the first time.
Machinery and Equipment Assessment covers the specific machinery required for your project — with actual specifications and current market quotations from authorised suppliers. Every major piece of equipment must be listed with its supplier, its price, its capacity, and its technical specifications. Banks verify machinery costs against current market rates — reports without actual quotations are returned.
Raw Material Assessment covers your raw material sourcing plan — where you will source raw materials from, what the current market prices are, how reliably supply is available, whether there are seasonal availability variations, and what your storage requirements are. Banks check whether your raw material cost assumptions are realistic based on current market prices.
Site and Infrastructure Assessment covers your proposed project location — whether it is suitable for the type of business you are setting up, what utilities are available, whether power and water supply are adequate, what the road connectivity is like, and whether the premises meet any regulatory requirements for your specific industry.
Production Capacity Assessment covers your proposed production capacity — the number of units you can produce per day, per month, and per year at different levels of machine utilisation. Banks use this to verify that your revenue projections in the Economic Feasibility section are technically achievable given your machinery and production setup.
Manpower Assessment covers the skilled and unskilled labour requirement for your project — roles required, current salary benchmarks for each role in your location, availability of skilled workers in your area, and your recruitment plan.
Why Technical Feasibility Matters to Banks
Banks use technical feasibility to answer one specific question — is this project physically buildable and operable as described? A business plan with strong financial projections but weak technical feasibility signals that the promoter may not understand the operational realities of what they are proposing. Banks treat this as an execution risk.
At Sharda Associates our CA team prepares technical feasibility sections with actual machinery quotations from verified suppliers — not estimates — and production capacity assumptions grounded in real industry benchmarks for your specific business type and location.
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Type 2 — Economic Feasibility
Economic feasibility also called financial feasibility is the most scrutinised section of any Feasibility Report. It evaluates whether your project will generate enough revenue, profit, and cash flow to be commercially sustainable and to repay the bank loan on time for every year of the repayment period.
What Economic Feasibility Covers
Cost of Project covers a complete, item-wise breakdown of your total investment land and building, machinery and equipment, working capital, pre-operative expenses, and contingency provision. Every cost item must be grounded in actual market data not estimates.
Revenue Projections cover your expected annual sales for each year of the projection period — based on your production capacity from Technical Feasibility, your market demand from Market Analysis, and the selling prices for your product or service in your specific location. Revenue projections must be realistic relative to your capacity utilisation assumptions banks compare your projected output against your stated machinery capacity and flag inconsistencies.
Profit and Loss Projections cover your complete 5-year income statement showing revenue, all operating costs, depreciation, interest on loans, and net profit after tax for each year. Every line item must be supported by realistic market data raw material costs at current prices, labour costs at current market salary rates, utility costs at local rates.
DSCR Calculation is the most critical element of economic feasibility. DSCR Debt Service Coverage Ratio — is calculated as Net Cash Accruals divided by the total of Loan Repayment and Interest for the same year. Most banks require DSCR of at least 1.25 for every repayment year. A DSCR below 1.25 in any single year results in automatic rejection regardless of how strong everything else in the application looks.
Break-Even Analysis shows the minimum level of sales at which your business covers all its fixed and variable costs confirming for the bank that your break-even point is achievable within a realistic timeframe.
Payback Period calculates how many years it will take for your cumulative profits and cash flows to recover your initial investment giving the bank and the promoter a clear picture of the investment horizon.
Sensitivity Analysis shows how your project performs under adverse scenarios if raw material prices increase by 10 percent, if selling prices fall by 15 percent, or if capacity utilisation is 20 percent below projections. Banks use sensitivity analysis to assess whether your project remains financially viable even when conditions are less than ideal.
Why Economic Feasibility Matters to Banks
Economic feasibility directly answers the bank’s most fundamental question will this business generate enough cash to repay the loan on time? Without a correctly prepared economic feasibility section with verified DSCR calculations the bank has no structured basis for recommending loan approval.
At Sharda Associates our CA team structures economic feasibility projections to show healthy DSCR across every repayment year using realistic assumptions grounded in actual market data for your specific business and location.
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Type 3 — Operational Feasibility
Operational feasibility evaluates whether your project can actually be managed and operated effectively on a day-to-day basis — given the management team, organisational structure, and human resources available.
Banks and investors assess the promoter and management team as carefully as they assess the financial projections. A technically sound and financially strong project led by a promoter with no relevant experience or management capability raises serious concerns about execution risk.
What Operational Feasibility Covers
Management Team Profile covers the educational qualifications, professional experience, industry knowledge, and personal capabilities of all promoters and key management personnel. For your Feasibility Report this section must demonstrate that the people running the business have the specific skills and experience needed to operate it successfully.
Organisational Structure covers the proposed management hierarchy — who is responsible for what, how decisions will be made, and how different functional areas will be managed. Banks look for a clear, logical structure that matches the complexity of the proposed business.
Human Resources Plan covers the detailed staffing plan — all roles required, qualifications needed for each role, current market salary benchmarks for each role in your location, and your recruitment timeline. For skilled technical roles — your plan for hiring or training must be credible.
Supply Chain Management covers how you will manage your relationship with suppliers — procurement processes, quality control of incoming raw materials, inventory management, and your plan for ensuring consistent supply without disruption.
Production and Service Workflow covers the day-to-day operational process in detail — how raw materials flow through your production process, quality control checkpoints, packaging and dispatch procedures, and your systems for monitoring operational performance.
Customer Service and After-Sales covers how you will manage customer relationships — order handling, delivery, complaint resolution, and warranty management where applicable.
Why Operational Feasibility Matters to Banks
Banks lend money to people — not just to business plans. A promoter who cannot credibly demonstrate the operational capability to run the business they are proposing is a significant credit risk — regardless of how attractive the financial projections look on paper.
Type 4 — Scheduling Feasibility
Scheduling feasibility also called timeline feasibility evaluates whether your project can be implemented within a realistic and achievable timeline from loan disbursement to commercial production start.
This is the most underestimated type in Indian bank loan feasibility studies and yet it is the type that most directly affects your loan repayment plan.
What Scheduling Feasibility Covers
Implementation Timeline covers a detailed month-by-month plan from loan sanction to commercial production — showing exactly what happens in each month across the implementation period. This typically covers land finalisation or premises preparation, civil construction, machinery procurement and payment, machinery delivery, installation and commissioning, regulatory approvals, trial production, staff recruitment and training, and commercial production launch.
Critical Path Analysis identifies which activities must be completed before others can begin — and which activities are on the critical path for the overall timeline. Delays on the critical path delay the entire project.
Realistic Timeline Validation is the most important aspect of scheduling feasibility. Banks know from experience how long different types of projects take to implement. A food processing unit that realistically needs 6 months to commission should not claim a 2-month timeline just to show an early start to revenue generation. Banks identify unrealistic timelines immediately — and unrealistic timelines undermine your credibility across the entire Feasibility Report.
Moratorium Period Alignment is critical. Your bank loan will include a moratorium period — typically 6 to 12 months after disbursement during which principal repayment is not due. Banks need to verify that your implementation timeline is consistent with commercial production starting before the moratorium ends — ensuring revenue generation begins before your first EMI becomes due.
Why Scheduling Feasibility Matters to Banks
An implementation timeline that shows commercial production starting after the moratorium period ends — or that is clearly unrealistic given the construction and commissioning requirements — signals to the bank that the promoter has not thought through the implementation seriously. Banks treat unrealistic timelines as a risk indicator that affects their assessment of the entire feasibility report.
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Type 5 — Legal Feasibility
Legal feasibility evaluates whether your project can be legally executed — identifying all required licences, permits, regulatory approvals, and compliance requirements — and confirming that none of these represent an insurmountable barrier to the project proceeding.
What Legal Feasibility Covers
Business Registration Requirements covers all registrations required for your business — company or firm registration, Udyam MSME registration, GST registration, and any entity-specific registrations.
Industry-Specific Licences covers all licences and permits specific to your industry. Food businesses need FSSAI licences. Pharmaceutical businesses need Drug Licences. Manufacturing units above a certain size need Factory Licences. Hotels need Tourism Department approvals. Food processing plants need BIS certification for specific products. Dairy businesses need veterinary department approvals. Your legal feasibility section must list every applicable licence with its current status and realistic timeline for obtaining any that are pending.
Environmental Clearances covers environmental compliance requirements — particularly important for manufacturing, chemical processing, food processing, and any project that generates waste or emissions. The legal feasibility section must identify the applicable pollution control category for your project and the required clearances.
Land and Building Compliance covers zoning and land use compliance — whether your project location is legally permitted for your specific business activity. Residential zone locations cannot host industrial activities. This must be verified and confirmed in the legal feasibility section.
Labour Law Compliance covers applicable labour laws for your employee count — the Minimum Wages Act, Provident Fund and ESI obligations, Shops and Establishments Act registration, and Contract Labour regulations where applicable.
Why Legal Feasibility Matters to Banks
Unresolved legal and regulatory barriers are a direct lending risk for banks. If your project faces a legal obstacle that prevents it from operating — the bank’s security is compromised. Banks treat missing or inadequate legal feasibility as a risk indicator and will typically return the file for this to be addressed before appraisal proceeds.
Additional Feasibility Types When Are They Required
Beyond the core 5 types some projects require additional feasibility analysis.
Market Feasibility
Market feasibility is sometimes presented as a standalone section within the Feasibility Report going deeper than the market analysis in your Project Report to provide an independent assessment of demand, competitive dynamics, and your business’s realistic market penetration potential.
This is particularly important for projects entering competitive markets food processing, retail, services where the market assessment directly determines whether your revenue projections are credible.
Environmental Feasibility
Environmental feasibility is required for projects with significant environmental impact large manufacturing units, chemical processing, mining-linked businesses, and any project requiring environmental clearance from the state or central pollution control board. It assesses the environmental impact of the project and the mitigation measures in place.
Social Feasibility
Social feasibility is typically required for government-funded projects, rural development projects, and FPO or SHG-linked businesses — assessing the social impact of the project including employment generation, income improvement for the target community, and alignment with government development priorities.
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How All 5 Types Work Together in a Complete Feasibility Report
The 5 types of feasibility are not independent assessments — they are interconnected. The outputs of one type feed directly into another.
Technical feasibility determines your production capacity — which sets the ceiling on your revenue projections in economic feasibility. Economic feasibility projections must be consistent with the operational costs established in operational feasibility. Scheduling feasibility determines when revenue starts — which directly affects the DSCR calculations in economic feasibility for the first repayment years. Legal feasibility identifies the regulatory approvals required — which affects the scheduling feasibility timeline if approvals take longer than expected.
A complete, internally consistent Feasibility Report shows the bank that all 5 dimensions of your project have been independently assessed and found to be viable — and that the assessments are consistent with each other. This is significantly more convincing than even the most optimistic Project Report presented without this structured independent analysis.
Feasibility Report for Different Loan Types — What Each Scheme Requires
Different loan schemes have different specific requirements for Feasibility Reports — and preparing a generic Feasibility Report without scheme-specific customisation is one of the most common reasons scheme portal applications get rejected.
For PMEGP applications the Feasibility Report must be in the exact format required by KVIC/KVIB/DIC — covering all 5 types of feasibility with particular emphasis on employment generation and market viability of the proposed product or service.
For CGTMSE collateral-free loans the Feasibility Report must demonstrate particularly strong economic feasibility since the bank is lending without collateral and relies entirely on the business viability assessment.
For NABARD loans for agriculture, dairy, food processing, and rural businesses the Feasibility Report must address specific NABARD technical parameters including livestock management plans for dairy businesses, agronomy assessments for horticulture projects, and cold chain specifications for perishables storage.
For CMEGP applications in Madhya Pradesh the Ffeasibility reportmust follow the specific MP state government format — which our Bhopal-based team at Sharda Associates prepares with hands-on experience across all MP districts.
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Feasibility Report vs Project Report vs DPR — What is the Difference
This is the most common question entrepreneurs ask when they are told they need multiple documents.
A Project Report is your business plan — covering business description, market analysis, technical plan, cost of project, and financial projections. It tells the bank how your business will work.
A Feasibility Report is a pre-investment analysis — evaluating whether your project is viable across all 5 feasibility dimensions. It tells the bank whether your business should proceed at all.
A Detailed Project Report is a more comprehensive version of the Project Report — required for loans above Rs.25 lakh — going significantly deeper with multi-scenario projections and sensitivity analysis.
A CMA Report is the 7-statement RBI format financial analysis — mandatory for all loans above Rs.10 lakh — providing the structured financial verification the credit team uses for appraisal.
For most government scheme applications — PMEGP, CGTMSE, NABARD — you need a Feasibility Report and a Project Report submitted together. All financial figures must be completely consistent across both documents. At Sharda Associates we prepare all documents simultaneously — guaranteeing consistency before delivery.
Common Mistakes in Feasibility Reports That Cause Rejection
Based on our experience preparing over 45,500 reports at Sharda Associates — these are the most common mistakes that cause Feasibility Reports to be returned by banks and scheme portals.
Missing one or more of the 5 feasibility types entirely — any type that is completely absent results in the file being returned before appraisal begins. Banks have a checklist and every type must be present.
Superficial coverage of any type — a one-paragraph technical feasibility section without machinery specifications or supplier quotations is treated the same as missing. Each type must be substantive and specific.
Economic feasibility showing DSCR below 1.25 in any repayment year — results in automatic rejection regardless of how strong the other types are.
Scheduling feasibility showing commercial production starting after the moratorium period — signals the bank that revenue will not be generated in time for loan repayment.
Legal feasibility not addressing known regulatory requirements for the specific industry — leaving the bank uncertain about whether the business can legally operate.
Inconsistency between the Feasibility Report economic projections and the Project Report financial projections — any figure mismatch raises immediate credibility questions.
Generic content not specific to the business and location — bank credit officers identify template reports immediately.
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How Sharda Associates Prepares Your Feasibility Report
At Sharda Associates every Feasibility Report is personally prepared by a qualified Chartered Accountant covering all 5 types of feasibility — with specific research for your business type, your project location, and your specific bank or scheme portal requirements.
We prepare your technical feasibility with verified machinery quotations and production capacity grounded in industry benchmarks. We prepare your economic feasibility with financial projections showing DSCR above 1.25 for every repayment year — based on real market data for your specific business and location. We prepare operational feasibility covering your management capability and HR plan. We prepare scheduling feasibility with a realistic month-by-month implementation timeline. And we prepare legal feasibility identifying every applicable licence and regulatory requirement for your specific industry and state.
We prepare your Feasibility Report alongside your Project Report and CMA Report — as an integrated package ensuring complete consistency between all financial figures across all documents.
We are based in Bhopal, Madhya Pradesh. Our Bhopal-based team has specific experience with PMEGP, CMEGP, NABARD, and CGTMSE Feasibility Reports for all districts of MP and for clients across all states of India.
Conclusion
A Feasibility Report covering all 5 types — Technical, Economic, Operational, Scheduling, and Legal — is not just a documentation requirement. It is the structured, independent evidence that tells the bank your project is viable from every critical angle — that it can be built, that it will make money, that the management can run it, that it can be implemented on time, and that it can legally operate.
Getting all 5 types right — with consistent figures across the entire report and alignment with your Project Report — gives your loan application the strongest possible foundation for approval at the first submission.
At Sharda Associates our CA team prepares complete Feasibility Reports covering all 5 types — personally, specifically for your business and location, and with the banking expertise built from helping over 45,500 businesses across India get their loans approved.
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Frequently Asked Questions
1. How many types of feasibility study are there for bank loans?
A complete Feasibility Report for a bank loan covers 5 main types — Technical Feasibility, Economic Feasibility, Operational Feasibility, Scheduling Feasibility, and Legal Feasibility. All 5 must be present and substantive. Missing any type results in the bank returning the file before appraisal begins. Get Your Complete 5-Type Feasibility Report →
2. What is the most important type of feasibility for bank loan?
Economic Feasibility is the most scrutinised type — particularly the DSCR calculation. DSCR must stay above 1.25 for every repayment year. A DSCR below this threshold in any single year results in automatic rejection regardless of how strong the other types are.
3. What is the difference between technical and economic feasibility?
Technical Feasibility evaluates whether your project can physically be built and operated machinery, raw materials, capacity, location. Economic Feasibility evaluates whether your project will generate enough revenue and profit to be commercially sustainable and repay the bank loan. Both must be strong and consistent with each other.
4. What is Scheduling Feasibility and why does it matter?
Scheduling Feasibility is a month-by-month implementation timeline from loan disbursement to commercial production. Banks verify that commercial production will begin before the moratorium period ends — ensuring revenue generation starts before EMI repayment begins. An unrealistic timeline is a credibility risk.
5. Is a feasibility report mandatory for PMEGP?
Yes. Most PMEGP empanelled banks require a Feasibility Report alongside the Project Report for loan processing particularly for loan amounts above Rs.10 lakh. The Feasibility Report must be in the exact format required by KVIC/KVIB/DIC.
6. Can a new business with no ITR get a Feasibility Report prepared?
Yes. For new businesses our CA team prepares complete economic feasibility projections based on real industry benchmarks and market research for your specific business type and location without requiring ITR or audited financial statements.
7. Do I need both a Project Report and a Feasibility Report?
For most government scheme loans PMEGP, CGTMSE, NABARD, Stand Up India yes. Both are required and must be submitted together. All financial figures must match exactly across both documents. We prepare both simultaneously as an integrated package. Get Your Integrated Package →
8. How much does a feasibility report cost at Sharda Associates?
Our Feasibility Reports start at Rs.2,999. Combined Feasibility Report plus Project Report package starts at Rs.4,999. Complete package including CMA Report starts at Rs.6,999. Call or WhatsApp +91 89899 77769 for a free same-day quote.