Coffee Shop Feasibility Study in the Baltimore-Columbia-Towson, MD Metro Area

Every coffee loan here is 7(a)

Baltimore-Columbia-Towson posts 67 loans to coffee shops and snack bars across FY2017 to FY2026, $16.5 million approved, and all 67 are 7(a); the 504 count is 0. A median of $200,000 is 0.83x the national figure. The middle half runs from $42,500 to $363,200, which means many borrowers ask for little more than a fit-out.

Nothing unusual in weight

Franchise share is 53.7%. Baltimore comes in at 31 of 612 across all metro and micro areas on coffee volume, while coffee itself is 8 of 39 here. The location quotient of 0.99x means coffee's share of local lending matches the national share almost exactly, so the metro is neither unusually crowded nor unusually thin on this measure.

Four jurisdictions and one big holder

Baltimore city, MD records 18 loans, Anne Arundel County, MD 17, and Baltimore County, MD and Howard County, MD 13 each, so the metro splits into distinct trade areas with different rents and traffic. Manufacturers and Traders Trust Company accounts for 24 of the 7(a) loans as holder, $3.6 million, which is a third of the record or thereabouts. SBA's holder field only supports that tally. Years that print are FY2017 (8 loans, $814,400), FY2019 (6, $1.1 million), FY2021 (5, $1.1 million), FY2022 (5, $1.4 million) and FY2023 (10, $2.4 million). FY2018, FY2020 and FY2024 to FY2026 are withheld.

Gaps

Cancellation and charge-off figures for Baltimore coffee are withheld, the loan counts being thin, so nothing is given and nothing should be read as zero. The Baltimore count is only as good as the name match between each project county and the July 2023 area list. Because the whole record is 7(a), a study should expect working-capital style underwriting, not a real estate purchase.

Questions for a Baltimore coffee study

Walking and commuter traffic at the specific block matter more than the metro average, and the study should compare city, Anne Arundel, Baltimore County and Howard County locations on rent and wages. Test equipment and buildout cost against the smaller loan sizes seen here, and run coverage at a loan near the lower quartile as well as the upper. The appraiser should treat leasehold improvements and equipment as separate collateral.