Coffee Shop Feasibility Study in Arizona

Arizona coffee lending is franchise lending

Franchised shops account for 57.2% of Arizona's SBA coffee shop and snack bar loans, and that shapes everything else on this page. The 194 approvals from FY2017 to FY2026 carried $90.0 million, rank 15 of 53 among states and 9 of 39 among Arizona classes, and give a location quotient of 1.14x. The Arizona median of $350,000 is 1.46x the national median for the class.

Maricopa County holds 144 of the loans and Pima 26, with Mohave next at 5. Arizona's middle band of loans spans $150,000 to $558,450. Under 7(a), The Huntington National Bank comes first in Arizona coffee with 23 loans for $7.8 million, Midwest Regional Bank holds 11 for $4.4 million, and Bank Five Nine's 7 loans total $10.5 million, the most dollars in the list. Arizona Capital Source appears under both programs, holding 8 loans under 7(a) for $1.6 million and 7 of the 504 loans for $3.0 million. JPMorgan Chase Bank, National Association holds 8 for $1.4 million. SBA 7(a) carries 179 loans and SBA 504 carries 15.

Floors on the Arizona coffee record

At least 11.4% of Arizona approvals from FY2017 to FY2024 were cancelled, 13.6% at the ceiling. Charge-offs reached 6.3% of the 63 loans funded in FY2017 to FY2021, with only 1.6% inside five years, so most of the Arizona coffee losses surfaced after year five. Both are floors. Lending has accelerated: FY2019 saw 9 loans, FY2025 32 loans for $21.9 million, and FY2026 30 for $13.8 million.

Testing an Arizona coffee site

Because so many Arizona deals are franchised, a study has to test the brand's unit economics against this specific site rather than accept the system average. Demand work means morning traffic, drive-through stacking and access, and the competing shops within a few minutes' drive in Maricopa or Pima. Cost covers the pad or lease, the build-out to brand standard and the franchise obligations, and debt service coverage should hold at ticket and transaction counts below the brand's projections, since losses in this cell tend to surface after year five. An independent shop faces a higher bar, because the record behind this median is mostly branded. If the Arizona loan buys a pad or building, value should be proved with comparable pad sales and leases.