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What is... Economic Viability

The term “Economical Viability” is not a phrase heard on a daily basis, outside of a few certain financial circles. That said, they are heard quite often, though separately.

Therefore, to define this term we shall view them individually first.

“Economical” (or economic) is generally associated with being careful, efficient, and prudent; thereby operating with little waste or at a savings.

“Viability” (or viable) is to be capable of working, functioning, or developing adequately as an independent unit and having a reasonable chance of succeeding.

When combining the two, “Economical Viability” vis-a-vis project financing begins to take on the meaning that a project will independently support itself in meeting and/or exceeding its financial obligations and risks, while also producing a level of income consistent with the expectations of the associated parties.

To Capital Corp Merchant Banking, this term is crucial to any given project. Therefore, as part of the Requirements set forth, an Economic Viability Report must be completed by an independent third party (firm) who will confirm whether a project is (or not) economically viable.

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