Feasibility study for financing: what lenders in Saudi Arabia ask for

Do lenders require a feasibility study?

It varies by lender and product. From the official source: the Social Development Bank’s “Entrepreneur Financing” ranges from SAR 50,000 to SAR 500,000, with terms up to 9 years and a grace period up to 12 months ^[1]. Its published required files are the applicant’s qualification, IBAN, commercial registration, guarantors’ IDs and a guarantor salary certificate ^[1]. The list does not mention a feasibility study.

The bank offers other business products, including “Excellence Financing” for innovative or technology projects up to SAR 4 million, and franchise financing ^[2], each with its own requirements.

The SME Bank runs a “Loan Guarantee Programme” with partner lenders to improve SMEs’ access to financing through guarantees ^[3]; you apply through the partner lender.

Bottom line: do not assume a study is required. Read the product requirements on the official site and ask the lender in writing.

Why you need the study anyway

• To borrow the right amount: the study calculates the maximum cash deficit before break-even.
• To know your repayment capacity: does cash flow cover the monthly instalment, and with what margin?
• To choose the term and grace period.
• To answer with numbers when asked about costs and revenue.

What a financing study should contain

• Five-year projected income statement, cash flow and balance sheet.
• A repayment schedule and its monthly cash impact.
• Debt service coverage each year.
• A conservative scenario showing whether the project can still repay.
• A source for every key figure.

At Madrous this is the “Financing file”, file five of the package. If the project turns out not to be feasible, you receive an alternative-path plan instead.

Important

We do not promise financing and do not claim accreditation with any lender. See what an accredited study means.

Frequently asked questions