Life Science Lab Feasibility Study

Questions buyers ask

Who prepares life science lab feasibility studies for lenders?

A consultant with no stake in the project, standing apart from the borrower, the landlord and the contractor, whose conclusions a credit officer can lean on. Loan Analytics prepares life science lab studies for lenders financing through SBA 7(a) or 504, through USDA's Business and Industry program, or on plain bank terms, and Daniel Smith, MAI signs the finished report. Our work sets the request against the class record on this page, 292 7(a) loans for $143.4 million and 48 504 loans for $72.3 million approved from FY2017 to FY2026, with cancellation floors of 11.0% and 20.0%. It then tests the borrower's funding, the space, the fit-out budget, debt service and the value of the finished lab.

What will my lender require in a life science lab feasibility study?

Proof on the failure points this record shows. Before funding, the class carries cancellation floors of 11.0% under 7(a) and 20.0% under 504, so the lender wants proof the project can close as approved: a fit-out budget priced to lab specifications, an appraisal that supports it, and funding in place. Once the money is out, the 3.7% charge-off floor for 7(a) means debt service has to hold while research spends cash. For an owner-occupant that means runway from awards, contracts, sales and committed investment; for a leased building, tenants who need lab space in that submarket, set against the competing space they could choose instead.

How much does a life science lab feasibility study cost?

Our source for price is the survey of posted feasibility fees that Loan Analytics ran for 2026 and published on this site. Its lowest band, $5,000 to $12,500, is for SBA work on one location with a common special-purpose property; complex work, such as ground-up building, phased delivery, more than one site or an unusual concept, runs $10,000 to $25,000 in the survey. Work prepared for a USDA lender under 7 CFR Part 5001 is listed apart, its range opening at $7,500 and passing $18,750 in some cases. Life science labs are not named in the survey. A ground-up lab building or a heavy fit-out delivered in phases matches its description of complex work, while a single-site study of an operating research firm is nearer the lowest band. Each study is quoted after scoping.

What makes the fee for a lab study higher or lower?

According to the 2026 survey of feasibility fees posted on this site, scope, asset class and program are what move a fee within its band. For a lab, scope rises with the fit-out: wet lab space with fume hoods, heavy air handling and standby power needs a cost review that dry or office-like research space does not. A building leased to outside tenants adds a demand and competing supply analysis for the submarket; an owner-occupant adds a runway analysis of grants, contracts and investor money. A request above the highest size band either program has lent in has no SBA comparable, so the field evidence carries more of the study. Where one study has to satisfy a USDA lender too, it follows the longer USDA list, and the survey's USDA range applies instead, one that begins at $7,500 and for some studies exceeds $18,750.

How long does a life science lab feasibility study take?

The timeline is part of our answer to your scope request, and we set it from the lender's deadline, which is a field on the request form. For a lab, what decides it is how soon other parties deliver their pieces: the borrower's grant awards, contracts and investor commitments; tenant letters of intent for a leased building; the contractor's pricing for ventilation, fume hoods, power and floor reinforcement; and the appraiser's schedule. A request that arrives with those papers moves faster than one waiting for them, and the study cannot finish its cost test until the fit-out is priced, so a borrower who has a priced lab plan should send it with the request.

Which SBA program finances more life science lab projects, 7(a) or 504?

By count, 7(a): 292 approvals for $143.4 million from FY2017 to FY2026, against 48 504 approvals for $72.3 million. By size, 504: its median is $1.0 million against $235,000 under 7(a). The 504 loans are the nearer measure of buying or building lab space, while most 7(a) loans fund instruments and operations, with 129 of them at $150,000 or less. At the large end the programs are level, with 16 approvals each in the highest band either filled. The latest year splits them sharply: in FY2026, 7(a) approved 32 loans for $24.3 million and 504 approved none, so a lab buyer choosing a program should expect a 504 lender to have little recent class history to compare.

How large are SBA loans to life science labs?

Under 7(a), the lower quartile is $83,000, the median $235,000 and the upper quartile $500,000. Under 504, the quartiles are $498,750, $1.0 million and $2.2 million. In California, which holds 21 of the 48 504 loans, the median across both programs is $500,000; Florida's is $350,000 and Massachusetts's $195,900. No loan in either program reached the open-ended top size band. A request should be compared with the quartiles of its own program: a request near the 504 median is ordinary there but lies above the 7(a) upper quartile, where a lender reads it as a large loan for the class and expects the study to justify it.

Why are most SBA life science loans small when lab buildings are expensive?

The code on each loan records what the borrower does, research and development, not what the money buys. Many approvals are therefore loans to operating research firms for instruments, computing and working capital: 129 of the 292 7(a) approvals were no larger than $150,000, together $9.7 million. Building-scale borrowing shows up in the 504 record, with its $1.0 million median, and in the 16 7(a) loans and 16 504 loans in the highest filled size band, which carry $49.4 million and $47.3 million. The code also counts engineering and physical science research, so not every loan finances a life science lab, and a study uses the size bands to find the loans that resemble its project.

How often are SBA life science lab loans cancelled before they fund?

At least 11.0% of 7(a) approvals and 20.0% of 504 approvals in this class were cancelled before funding, and in California the floor is 20.5%. These are floors: approvals that had not yet disbursed when the data was cut may still cancel, so the true figures can be higher. For a lab project the 504 figure is the one to plan around, because it falls on the loans that buy or build space. A study protects an approval by testing in advance the points where lab deals come apart before closing: the fit-out cost against the budget, the appraised value against the cost, and the borrower's funding or tenant commitments against the closing date.

How many SBA loans to research and development firms are later charged off?

For the 7(a) loans that disbursed during FY2017 to FY2021, losses already written off reach at least 3.7%, with 2.8% inside 5 years. For 504 the page prints no rate, since fewer than 30 loans make up that cohort; that is the absence of a reliable figure, not a rate of zero. No state's charge-off figure is printed either, because none has 30 loans in its cohort. A lab study therefore has only the national 7(a) floor as a loss benchmark, and it should test debt service in a case where research income slows or a funding round slips, since part of the class's losses came after the first 5 years.

Which states have the most SBA life science lab lending?

California leads with 57 loans for $56.5 million. Florida and Massachusetts follow with 31 each, at $32.2 million and $13.0 million. Texas has 24 loans for $14.5 million and Ohio 19 for $7.6 million; Illinois and Washington have 12 each, Colorado and North Carolina 11 each, and Pennsylvania 10. Colorado's 11 loans carry $11.1 million, more than several states with more loans, and Nevada's 6 carry $7.6 million. Medians and program splits appear only for California, Florida and Massachusetts, and only California carries a cancellation floor, 20.5%, so a study for any other state benchmarks against the national rows.

Does a lab feasibility study in California differ from one elsewhere?

Yes, because California is the one state whose own record can carry the comparison. Its 57 loans give a median of $500,000, a split of 36 under 7(a) and 21 under 504, and a cancellation floor of 20.5%, above both national floors. A California study can benchmark a request against the state rather than the nation, and it has to answer the cancellation figure directly, so the closing tests on cost, value and funding come first. California also has the deepest research industry in the Census table, 4,201 establishments and 168,094 employees in 2023, so the tenant case can draw on a broad base, while the competing lab supply in the submarket has to be measured directly.

My state has only a few SBA lab loans. Can the study still make the case to a lender?

Yes, but it borrows its benchmarks. Outside California, Florida and Massachusetts the table prints counts and dollars only, and many states have fewer than 5 loans or no row at all, Connecticut among them despite 253 research establishments in 2023. In those states the request is compared with the national program quartiles and floors, builds demand from the state's industry figures and from the project's own tenants or funding, and says plainly that the state's SBA record is too thin to serve as a comparison. A lender reading a study for such a state wants that limit stated where it can see it.

Why does the SBA record show almost no lab loans before FY2017?

The class is defined by industry codes of the 2017 edition of the North American Industry Classification System, and SBA's files place loans under those codes in number only from FY2017. FY1991 to FY2002 are not measured, and FY2004 to FY2016 show 0 loans in both programs apart from 1 7(a) approval in FY2014. Those zeros are a feature of the coding, not evidence that no research firm borrowed. The usable history for this class begins in FY2017, which is why the long-run total of 293 7(a) loans barely differs from the 292 of FY2017 to FY2026, and a study works from FY2017 onward.

Is SBA lending to life science labs growing?

Under 7(a), yes in count, with swings. Approvals ran between 17 and 31 a year from FY2017 to FY2023, rose to 40 in FY2024 and 51 in FY2025, and were 32 in FY2026, when they carried $24.3 million, the largest 7(a) dollar figure the table prints. Under 504 the direction reversed: approvals peaked at 10 in FY2022 with $17.1 million, held at 8 in FY2024 and FY2025, and fell to 0 in FY2026. A study for a 504 lab project should not cite momentum; one for a 7(a) request can point to a record that has grown, with FY2026 loans running larger than those of the busy FY2025.

How does a feasibility study judge a lab borrower that is not yet profitable?

By runway rather than by earnings. The study sets the borrower's cash on hand, grant awards with their terms, contract revenue with its counterparties and timing, and investor money that is signed rather than expected against rent, debt service and the research budget, period by period, until revenue arrives. It then runs a case in which a grant renewal or a funding round slips and shows whether debt service still holds. The class record explains the caution: the 7(a) loans of this class paid out over FY2017 to FY2021 carry a 3.7% charge-off floor, and part of those losses came after 5 years, and coverage resting only on projected milestones is coverage a lender will discount.

How does the study treat the value of a lab fit-out?

As a cost that may not carry over to the next owner. Fume hoods, specialized exhaust and air handling, emergency power and reinforced floors cost more than office build-out, and a later occupant who does not need them will not pay for all of them. The study and the appraisal have to agree on what part of the fit-out a second research user would buy, and on what the space is worth if it is converted to another use. The 504 cancellation floor of 20.0% falls on the loans most exposed to that gap, so a study that leaves the value question to the appraiser alone leaves the lender carrying the risk that cost and value part ways before closing.

Does the study also cover engineering and physical science labs?

Yes. The SBA class and the Census table both rest on research codes that include engineering and physical science research besides biotechnology, so the 292 7(a) and 48 504 loans, and the 791,323 employees counted nationally in 2023, mix life science labs with other research. A study for an engineering, materials or physics lab uses the same record and asks the same questions about funding, demand, cost, coverage and value, but its cost review follows the lab's actual systems rather than a wet lab template, and its value analysis turns on how far those systems suit other users in the same submarket.

Will a USDA Business and Industry lender accept the same study?

Each study follows the program its lender uses, and for a Business and Industry lender that means the standard in 7 CFR Part 5001. The fee survey on this site for 2026 gives that work a band of its own, beginning at $7,500 and running to $18,750 and higher. This page carries no USDA figures for the class, so a USDA study takes its loan benchmarks from the SBA record here, 292 7(a) and 48 504 approvals since FY2017, and its demand case from the project, its tenants or its funding, and from the state's research industry in the Census table.