Coffee Shop Feasibility Study in Florida

Cancellations and size set this cell apart

Loan size and cancellation make Florida's coffee shop and snack bar lending different from both Florida's overall SBA book and the class nationally. The Florida median loan is $353,200, 1.47x the national median for the class. And Florida coffee deals approved in FY2017 through FY2024 saw at least 16.5% cancelled before they funded, while adding undisbursed loans lifts the ceiling to 18.3%. Size and cancellation may be connected here, since a larger project has more parts that can fail before it closes.

Franchise brands drive the file. They account for 59.9% of loans, and a franchise unit brings a site approval, a build-out specification and a development schedule, any of which can shift after an SBA approval and send a deal back to the start. A Florida borrower should plan for that risk, and a lender should expect some of its approvals here never to fund.

Growth, programs and lenders

The class has grown fast in Florida. Approvals rose from 22 in FY2017, worth $4.7 million, to 95 in FY2026, worth $47.9 million. Over the decade 516 loans were approved for $244.4 million, putting Florida 3 of 53 states, though the location quotient of 0.85x shows the class weighs a little less in Florida than nationally, and it ranks 10 of 39 among the state's classes. SBA 7(a) carried 493 loans and SBA 504 just 23. The Huntington National Bank is current holder of 61, Newtek Bank, National Association 33 and TD Bank, National Association 32, the last worth only $2.0 million. First Federal Bank holds 25 loans worth $23.6 million, much larger tickets. On 504, 13 coffee loans sit with Florida First Capital Finance Corporation, Inc.

Loss so far is moderate. Of 129 Florida coffee loans funded across FY2017 through FY2021, 7.0% or more have been charged off, 3.9% within their first five years. That cohort comes from years with far fewer approvals than recent ones, so these floors describe the earlier, smaller market more than the current one.

What a Florida coffee study has to test

The study's first job is to show that the deal will close as planned, which means confirming the site, the franchise approval where there is one, and the construction budget before the loan request is final. Demand should be tested on morning traffic, access and drive-through stacking in counties such as Broward, Orange, Hillsborough, Miami-Dade and Palm Beach, which hold 62, 50, 46, 40 and 34 of the approvals. Cost has to carry the full build-out at a ticket near the $353,200 median. Coverage should hold at a realistic sales ramp, and the appraisal must separate the building from the brand.