The short answer
A feasibility study asks whether a project should go ahead. A business plan assumes it will, and sets out how the business will run and grow. Funders in Saudi Arabia use the two words loosely, and some lists accept either, so it's worth knowing which one the reader actually needs before you commission anything.
What each document is for
| Feasibility study | Business plan | |
|---|---|---|
| Question it answers | Is this project viable, and on what terms? | How will this business operate and grow? |
| Typical use | New projects, new plants, new markets | Existing businesses, expansions, fundraising |
| Core content | Market, technical and financial study, with a financial model and sensitivity analysis | Strategy, operations, management, marketing plan and financial forecasts |
| Evidence base | Market data, supplier quotations, technical specifications | Trading history, customers, management track record |
| Main reader | Credit and technical teams at a fund or bank | Bank relationship managers, investors, partners |
Which Saudi funders ask for which
SIDF: a feasibility study, always
The Saudi Industrial Development Fund lists the feasibility study as mandatory, together with a separate financial model, an overview of the borrower and the owners' background and experience. A business plan does not replace it. SIDF also publishes a preparation guideline that sets out what the study must contain.
ADF: an economic feasibility study for project loans
For its specialised project loans, the Agricultural Development Fund asks for an economic feasibility study and a licence from the Ministry of Environment, Water and Agriculture.
Kafalah-backed bank finance: either, depending on the business
Banks lending under the Kafalah guarantee programme publish their own checklists. Bank Albilad's list, for example, asks for a feasibility study for new projects or a business plan, and for existing projects, three years of audited or in-house financial statements. In practice, a new project needs the feasibility study and an established business can usually use a business plan backed by its accounts.
Investors and boards: whichever answers their question
An investor deciding whether to back a new venture wants feasibility-style analysis: market evidence, unit economics and downside cases. An investor in a growing business usually wants a business plan with a clear use of funds.
When one document can do both jobs
For an expansion of an existing business, a single document often works: a business plan built on historical accounts, with a feasibility-standard section on the new capacity or market, and a financial model that covers the whole company. That serves the bank's credit team and the shareholders at the same time.
The reverse doesn't work as well. A business plan written for investors rarely has the market evidence, supplier quotations or sensitivity analysis that SIDF or a bank's credit team expects, and it usually gets sent back.
How to decide
- Read the funder's list. If it names a feasibility study, write a feasibility study.
- Look at your history. No trading history means the study has to do the persuading on its own.
- Think about the next reader. If the same project will go to SIDF after a bank or an investor, write it to SIDF's standard now.
- Keep one set of numbers. Whatever the document is called, the narrative, tables and Excel model should agree.