Coffee Shop Feasibility Study in Louisiana

Franchises and small tickets

Louisiana coffee lending is shaped by franchising. Just over half of the 69 SBA loans approved between FY2017 and FY2026 carry a franchise flag: 52.2%. Together they come to $19.3 million, which is modest, and the median loan is $153,000, only 0.64x the nationwide median for coffee shops and snack bars. Loan sizes in the central band span $100,000 to $350,000. The location quotient of 1.19x says the class takes a somewhat larger share of Louisiana approvals than of the national book, and it ranks 7 of 39 inside the state, while the state itself sits 32 of 53. A lender should expect brand-backed single units with compact budgets.

Where the loans sit and who makes them

The program split is lopsided: 67 loans under SBA 7(a) and just 2 under SBA 504, because leased storefronts and drive-through pads rarely involve owned real estate. Newtek Bank, National Association appears with 6 loans but only $550,000 in total, suggesting very small notes. Orleans Parish leads with 16 loans, then Lafayette with 10 and Jefferson and Saint Tammany with 7 each, and Bossier with 5. The year profile is uneven. Approvals held near 6 a year from FY2017 to FY2021, climbed to 10 in FY2024 and 13 in FY2025 with $4.3 million, and dropped to 2 loans and $539,700 in FY2026.

Cancellation and the missing loss rate

Cancellation reaches a floor of 5.6% for approvals through FY2024, and the ceiling is identical, so few approvals fell away. For borrowers that is a comparatively low drop-off. We print no charge-off rate here, because the disbursed group from FY2017 through FY2021 has fewer than 30 loans, and a rate from so few loans would mislead. It must not be read as zero. Franchise systems often absorb weaker units by transferring them, which can hide distress from loan-level records, so a lender should ask for unit performance by brand and not lean on state totals.

What to test before borrowing

A Louisiana coffee study should measure traffic counts and drive-through queue capacity at the actual pad, since a stand-alone unit lives or dies on peak-hour throughput. It should compare the franchise fee and royalty burden with realistic sales per unit, stress the lease cost, and run debt service coverage on a conservative first-year volume. Seasonal weather, hurricane downtime and insurance cost deserve their own line. The appraisal is mostly of equipment and leasehold improvements, which carry thin liquidation value. Loan Analytics sets out the approved-loan record so the author of a study and the lender share one baseline.