USDA Feasibility Study Consultant in Hawaii

USDA does not require a feasibility study on every Business & Industry loan. The trigger sits in 7 CFR 5001.306: an independent feasibility study is required when the guaranteed loan to a new business exceeds $1 million, when the project is a hotel, motel or tourist or recreational facility, or when the Agency otherwise determines that a study is needed. Existing businesses with a proven operating history can often proceed on historical financials alone, but any Hawaii project that starts a new operation, enters a new market or adds an unproven revenue line should expect the study requirement.

The study must be prepared by an independent, qualified third party with no financial interest in the project's success, and it must address the five components Part 5001 names: market, technical, financial, management and economic feasibility. Lenders submit the study with the guaranteed loan application, and USDA reviews it as part of the Conditional Commitment.

Part 5001 requires the study to come from an independent consultant: a firm with no ownership in the borrower, no role in selling the project and no fee contingent on the loan closing. The consultant's conclusions must be its own, supported by verifiable data, and the report must state the consultant's qualifications and independence.

In practice, reviewers look for three things: demonstrated experience with the specific asset class, a methodology that matches the five Part 5001 components, and conclusions a lender's credit committee can defend. A study that reads as advocacy for the borrower is the most common reason Hawaii applications stall at review.

Hawaii's island-market, land-tenure and visitor-tax conditions raise the bar further: a consultant who cannot document island-level demand, ground-lease terms and the 2026 tax changes will not carry weight with the reviewer. The Hawaii state office expects the study to anticipate its questions, not react to them.

Hawaii does not appear among the ten largest B&I states for 2015–2024 in the national assessment commissioned by the National Rural Lenders Association. Named Hawaii USDA business and community deals since 2015 total about $17.2 million across 17 deals (calculated from the named sample). The largest is a single $10 million B&I guarantee to Hawaiʻi Sea Spirits on Maui for a distillery, retail and café expansion. Community Facilities precedent is deeper and centered on neighbor-island clinics and schools, and REAP has been active: GoFarm Hawaii reports $19.5 million in REAP funding to Hawaii since 2018. No hotel B&I deal has been named in Hawaii, even though hotels are B&I's largest sector nationally. A Hawaii application will usually build its own precedent file, which raises the weight a reviewer places on the independent study.

Hawaii has no incorporated cities below the county level, and USDA applies a specific rule to the City and County of Honolulu. Based on the 2020 Census, USDA considers only the Urban Honolulu census-designated place (350,964 residents) and the East Honolulu CDP (50,922) urban in character. All other areas of Honolulu County are treated as rural (7 U.S.C. 1991(a)(13)(G), as implemented by USDA Rural Development). That holds even though the Census Bureau's Honolulu urban area covers 853,252 people and reaches Pearl City, Waipahu and Ewa Beach. On that basis, 1,053,385 of Hawaii's 1,455,271 residents, or 72.4 percent, live in B&I-eligible areas (calculated).

Community Facilities projects must be in rural areas of 20,000 or fewer, so Hilo, Waipahu, Kailua, Kaneohe, Kahului and Kihei need individual review for CF. USDA housing programs use their own limits. Housing-eligibility sites that describe Kailua or Hilo as ineligible are not a guide to B&I eligibility. Every Hawaii study we prepare includes a dated, address-level USDA map determination.

Commercial projects in Hawaii often sit on leasehold land, and lenders require the ground lease to run past loan maturity. B&I program materials list federally recognized tribes as eligible borrowers, and Hawaii has no federally recognized tribe. We found no USDA guidance treating Hawaiian home lands as “tribal lands” for the 7 CFR 5001.454(d) reduced fee. Our position is that this route should be assumed unavailable unless the state office confirms it in writing. Other reduced-fee criteria still apply.

A continuing resolution funds USDA at FY2026 levels through December 11, 2026. The President's FY2027 budget request proposes terminating the B&I program, against a FY2026 program level of $1,428,889,000. The proposal is not enacted, but lenders should carry it as a policy-risk disclosure. The House-passed appropriations bill instead raises B&I loan authority to $2.0 billion. Until Congress acts, FY2026 terms govern.