Cold Storage Feasibility Study

Questions buyers ask

Who prepares a cold storage feasibility study that a lender will accept?

A lender wants the study from an author with no stake in the project, written as a third-party report it can keep in the credit file. Loan Analytics writes refrigerated warehouse studies for each route a cold storage loan can take (SBA 7(a), SBA 504, a USDA guarantee or plain bank credit), and Daniel Smith, MAI signs each refrigerated warehouse report. Our work begins with the national record on this page, 49 7(a) loans and 39 504 loans from FY2017 to FY2026, because the bank may have no refrigerated warehouse loan of its own to compare with. It then builds the local case: the customers who will contract for space, the cold storage already serving them, the cost of the building and plant, the power budget, coverage under stress, and the value the walls keep for an occupant with no use for refrigeration.

Does a lender require a feasibility study for a cold storage loan?

Not by one fixed rule, but a refrigerated warehouse fits the circumstances in which a study is asked for. This site's 2026 fee survey cites the SBA's authority to ask for one, and among the circumstances it lists are highly specialized project property and a unique market concept; it adds that lenders order studies under their own credit policies for special-purpose property and start-ups. A cold storage building, with its insulated envelope, refrigeration plant and freezer floors, is specialized by construction. The record supplies a second reason: with cancellation floors of 20.9% under 7(a) and 15.2% under 504, and no charge-off rate printed for either program, a lender has little history to rely on. And 19 of the 39 504 loans sit in the band just below the top, where the lender is weighing a large building with a narrow resale market, the very question a study is ordered to answer.

What will a refrigerated warehouse study cost us?

Our source is the 2026 fee survey, a post on this site that compiles the ranges study providers publish, and refrigerated warehouses go unnamed in it. Read against its bands, a single refrigerated building financed through SBA and built to a conventional plan sits with the special-purpose work priced from $5,000 to $12,500; a phased build, a campus of several buildings or an unusual concept moves up to the complex band, $10,000 to $25,000; and USDA work, written to answer 7 CFR Part 5001, is quoted from $7,500 up to $18,750 or beyond. Within a band the fact pattern sets the price, by the survey's own logic: an operating warehouse with trailing statements needs less work than a ground-up build, and several temperature zones delivered in stages read as complex. The survey also records that SBA neither fixes nor limits what a study may cost. Our fee for a given building comes back with its scope.

Can the cost of the study go into the SBA loan?

The 2026 fee survey on this site says it can in both programs: under 504 the debenture finances eligible soft costs as part of what the whole project costs, while the proceeds of a 7(a) loan may pay for the third-party reports the file needs. On a cold storage project the fee normally sits in sources and uses beside the appraisal and the environmental report. The survey's basis-point table also shows the fee shrinking against the loan as the loan grows; above roughly $2 million, it says, a study costs less than the appraisal on a going-concern property. The 504 cold storage median on this page is $2.1 million, and the busiest 504 band, over $2 million to $5 million, counts 19 loans, with 13 more from 7(a) in the same range; much of the class's building lending therefore sits where the fee is small beside the loan.

How long does a cold storage feasibility study take?

No fixed schedule applies to every study; we state the timeline in the reply that carries the scope. Among the factors this site's 2026 fee survey says add time, several fit refrigerated buildings: a ground-up project needs its construction budget checked and its ramp counted from opening day; each extra site needs a market section of its own; a USDA overlay brings the enumerated factors and a signed opinion; and a sparse rural market means checking comparable properties in person. Cold storage adds its own time where customer agreements are still in negotiation or the utility has not confirmed the electrical service, because a study should report those facts rather than assume them. Sending the draft agreements and the utility correspondence with the scope request lets the timeline account for them from the start.

How large are SBA loans for cold storage facilities?

From FY2017 to FY2026 the 7(a) median is $615,000, with a lower quartile of $175,000 and an upper quartile of $2.3 million; the 504 median is $2.1 million, with quartiles of $1.2 million and $4.9 million. Under 7(a) the loans split between small credits, 12 of them in the smallest band for $1.1 million in all, and building-scale loans, 13 in the band just below the top for $46.5 million. Under 504, 19 loans sit in that band for $67.8 million, and 3 go above it. No state has enough loans to print a median of its own, so a cold storage study benchmarks the proposed loan against these national figures and explains its position by building size, temperature zones and what the loan pays for.

Is 7(a) or 504 the better fit for a refrigerated warehouse loan?

Both programs lend to the class, and they split it by size. 7(a) made more cold storage loans, 49 against 39 from FY2017 to FY2026, but 504 carried more dollars, $102.3 million against $66.1 million, and every cold storage loan in the top size band was a 504 loan. The 504 middle, $1.2 million to $4.9 million, is building scale; 7(a) reaches that scale in its upper band and also makes small credits that 504 does not, since 504 has no loan in the smallest band. Cancellation runs higher under 7(a), 20.9% against 15.2%, both floors. The choice is the borrower's and the lender's to make; the study is written for the program chosen and, where the request may move between programs, sized so that either reader can rely on it.

Which states have the most SBA cold storage loans?

California leads by count with 18 loans and $26.5 million from FY2017 to FY2026, and Texas leads by dollars with $28.6 million on 11 loans. Wisconsin follows with 10 loans and $23.7 million, then Massachusetts with 7 and $20.5 million; Florida and Ohio show 5 each, and Virginia 3. The ranking by count hides differences in scale: Ohio's 5 loans total $726,100 against $6.2 million for Florida's 5, and from Virginia down every row prints its count with no dollar total, because each rests on fewer than five loans. None of the state rows carries a median, a split between programs or a floor, because none has enough loans. For a site in one of these states, the study uses the state's row as context, reads its total against its count to see what size of project the state has financed, and carries its performance comparison at the national level.

My state has one cold storage loan in the table, or no row. What does the study compare my project with?

With the national program rows. Where the state table shows a single loan, as it does for New York, Pennsylvania and North Carolina, or no row at all, as for Georgia and Illinois, there is no state benchmark, and one loan cannot be made into one. The study sets the project against the medians, quartiles, size bands and cancellation floors of its program and, where a neighbouring state leads its Census region, cites that row as regional context. The local evidence is then built directly: the processors, distributors and retailers who would use the space, the public refrigerated warehouses within trucking distance and how full they are, the rates they charge, and the electrical service the site can get. A lender will notice the thin state record, so the study addresses it openly.

Is SBA lending to cold storage growing or slowing?

By count it is slowing. 7(a) approved 3 cold storage loans in each of FY2025 and FY2026, against 10 in FY2020 and 6 in each of FY2023 and FY2024. 504 approved 5 in FY2025 and 1 in FY2026, after none in FY2024. The class has never been large: the 7(a) high is 12, in FY2011, and the 504 high is 7, reached in FY2017 and again in FY2021. Most annual dollar figures in the long table are withheld or rest on too few loans to print, so the table cannot show whether loan sizes are rising. A borrower applying now joins a quiet stretch for the class, and a study that documents committed customer demand gives the lender a reason to approve that the recent record does not.

How often are SBA cold storage loans cancelled or charged off?

Cancellation is the measured risk. Measured on FY2017 to FY2024 approvals, at least 20.9% of 7(a) cold storage approvals and 15.2% of 504 approvals were cancelled, and both figures are floors. Charge-offs are not reported for either program, on the full measure or within 5 years, because the disbursed cohort from FY2017 to FY2021 approvals holds fewer than 30 loans in each program. That blank is not evidence of low losses. For a cold storage borrower the practical reading is that the study has two jobs: making the approval hold, with signed or documented customer demand, a bid-backed budget and a confirmed power supply, and giving the lender a coverage and collateral case that stands without any loss history behind it.

We process food and want to build our own freezer. Is this the record our lender will use?

Usually not as your own industry's record. The class on this page counts borrowers whose industry is refrigerated warehousing, and a processor that builds cold space for its own product is classed in its own industry, so its loan would not be among these 171 7(a) and 118 504 loans. A lender may still read this page for the building, since construction cost, power and fallback value raise the same questions, but the demand case differs: an owner-user's feasibility rests on its own production and sales, and an operator's on outside customers. The study is scoped to the business the borrower actually runs, and where the building will also rent space to others, it tests both sources of revenue.

How is a cold storage feasibility study different from the appraisal?

An appraiser gives an opinion of value. The study asks a different question: will paying customers fill the rooms, and will the margin they leave cover the debt? For cold storage that means naming the customers and the terms on which they will take space, by temperature zone; surveying competing refrigerated space with its occupancy and rates; checking the construction budget for the envelope, plant, docks, slab and standby power; building a utility budget and running coverage at higher power prices and lower occupancy; and estimating the building's value to an occupant that would never switch the refrigeration on. The appraisal can draw on that market evidence where comparable sales are scarce. The record on this page, with cancellation floors of 20.9% and 15.2% and no printed charge-off rate, is why a lender wants both documents in the file.

Will my lender have financed a cold storage facility before?

It may not have. Across the whole country from FY2017 to FY2026 the record holds 49 cold storage approvals through 7(a) and another 39 through 504, scattered over many states, and this page does not rank lenders for the class. A credit officer may therefore meet a refrigerated warehouse for the first time in your file and read it against dry warehouse lending that the bank knows better. The study is written for that reader. It explains, with local evidence, what separates cold storage from dry space: the refrigeration plant, insulated envelope, freezer floors and power draw on the cost side, and handling charges and customer contracts on the revenue side. It also shows what part of the cost would hold if the building had to be sold to a dry warehouse user.

We are buying an operating cold storage business. Is a quality of earnings report the same as a feasibility study?

They are different documents. As this site's 2026 fee survey reports it, SOP 50 10 8.1 (effective October 1, 2026) makes a quality of earnings report a requirement where a business is bought for $3 million or more, lender summaries price it at $10,000 to $30,000, and the survey keeps it distinct from the feasibility study. A cold storage purchase at the scale of the 504 middle on this page, $1.2 million to $4.9 million, can cross that threshold. The quality of earnings report tests the seller's historical figures. The feasibility study tests the market going forward: the customer agreements and their renewal dates, the condition and remaining life of the compressors, evaporators and panels the buyer inherits, the utility cost, and whether coverage holds after the purchase.

What other third-party reports will a lender order for a cold storage loan?

Expect a stack of reports around the study. This site's 2026 fee survey gives their published ranges: the appraisal, $2,500 to $7,500 for ordinary assignments, with going-concern work on special-purpose property priced between $5,000 and $15,000; the environmental screen, a questionnaire and records search costing $300 to $1,500; a Phase I when the screen calls for one, and the package of title, survey and recording, each quoted between $2,000 and $5,000; and, if the business changes hands, a valuation costing $1,800 to $7,000. The survey notes that SBA's rules call for an appraiser with industry experience and a going-concern allocation on special-purpose property, the treatment a lender may give a refrigerated building with few local buyers. The feasibility study supplies the market and cost evidence those reports draw on, which is a reason to order it early.

Can a rural cold storage project use a USDA B&I guarantee?

We write cold storage studies for B&I lenders to the standard set out in 7 CFR Part 5001. On the USDA side, the survey of 2026 study fees that this site publishes makes a study compulsory when a new business, a refrigerated warehouse start-up among them, borrows more than $1 million under B&I, and it prices that work from $7,500 at the low end to $18,750 or more at the high end. Whether a given project qualifies is for the lender and the Agency to decide. No USDA loan is counted in any table here, so for a rural refrigerated warehouse the study's evidence comes from the trade area itself: the growers, processors and shippers who would use the space, the distance to the nearest public cold storage, and the power the site can draw.

What should I send to get a cold storage study scoped?

The address or parcel; whether the project is a new building, an expansion or a purchase; and the building as planned: floor area, pallet positions, temperature zones, dock doors and any blast freezing or handling services. Add the customer position, from signed agreements to letters of intent, the utility's service confirmation if there is one, the construction budget or the seller's statements, which program or lender you are working with, if any, and the loan amount. We read it against this page first: the state row, the program median and quartiles, the size band the loan falls in, and the cancellation floor that applies, and then reply with scope and timeline.