Coffee Shop Feasibility Study in Hawaii

Tiny loans, big share

Hawaii's coffee shop loans are the smallest in this set. SBA approved 43 of them from FY2017 to FY2026 for a combined $7.4 million, and the median loan is $50,000, only 0.21x the national median for the class. Half of the loans fall between $25,000 and $125,000. At the same time the sector has a large weight in the state: it ranks 3 of 39 among Hawaii asset classes, and a location quotient of 1.82x shows a share of approvals well above the national one, though the state ranks 38 of 53 on volume. Our test finds no distinctive outcome metric, so the story here is the small ticket.

Two banks, one island

All 43 loans used 7(a), with none under 504, and franchises are only 2.3% of the cell. Central Pacific Bank holds 27 loans and $1.9 million, a very low average that is typical of micro lending, and First Hawaiian Bank holds 8 loans and $662,400. Honolulu County accounts for 32 of the loans, Maui for 5, and Hawaii and Kauai for 3 each.

Trend and cancellations

Volume was low through the pandemic years, with a single loan of $25,000 in FY2020 and one of $50,000 in FY2021, then recovered, reaching 5 loans and $3.5 million in FY2023 and 11 loans and $1.6 million in FY2024. FY2025 had 6 loans and $420,000, and FY2026 shows none. Hawaii shows a cancellation floor of 5.4% across approvals to FY2024, with an equal ceiling. Hawaii has no loss figure, because too few loans funded early, and no claim of clean performance should be made.

Questions for a Hawaii cafe

At these loan sizes, most projects are cart, kiosk or small cafe start ups, and the study should say which. Start with customers: visitors and residents passing the site, hours of peak traffic, and the cafes already competing for them. Rent in prime locations can dominate the cost base, so the lease terms and percentage rent clauses must be modelled. Imported ingredients and shipping raise supply costs, which deserve their own line. Seasonality in visitor numbers should shape the monthly cash flow. With little collateral at this size, a lender will rely on the owner's experience, so the study should document it, and coverage must hold at a conservative daily sales figure with a slow first year.