Coffee Shop Feasibility Study in the Minneapolis-St. Paul-Bloomington, MN-WI Metro Area

Twin Cities coffee shops: fewer than elsewhere, with higher cancellations

Coffee shops and snack bars in the Twin Cities drew 91 SBA loans across FY2017 to FY2026, worth $35.8 million, 23 of 612 areas for the class and tenth of 39 locally. The location quotient is only 0.56x, so coffee shops weigh much less here than nationally. The median loan is $200,000, 0.83x the national class midpoint, with quartiles of $50,000 and $430,600. Cancellation after approval reaches 17.4% or more of FY2017 to FY2024 approvals granted, a floor and a high one. Franchised shops account for 26.4% of loans.

What Loan Analytics does not print

The counts of 7(a) and 504 loans are withheld, because they stand on too few loans or else would allow a small figure to be backed out; neither is zero. Two more values are withheld: the cancellation top-end figure and the charge-off rate. So are the yearly counts for FY2018 and FY2019. Only three holders can be named, all under 7(a): U.S. Bank, National Association with 17 loans worth $620,000, The Huntington National Bank with 10 worth $2.2 million and Sunrise Banks National Association with 8 worth $1.4 million. U.S. Bank's small average loan size shows in its dollars. These entries are SBA's records of holders and not a view of lender practice.

Counties and the pattern of years

Hennepin County holds 37 loans, Anoka 14, Dakota 9, Washington 7, Ramsey 6 and Carver 5. Yearly volume was tiny at first, with 5 loans and $533,000 in FY2017, and grew to 22 loans and $8.5 million in FY2024 and 13 loans and $10.0 million in FY2026. Yearly volume rose across the record, so the early years sit well below the later ones.

The study's job

A coffee shop study in the Twin Cities has to explain why this project can succeed in a local market where the class is less common and cancellations run high. It should test morning and midday traffic at the site, the winter effect on foot traffic, nearby competitors and drive-throughs, rent against sales, equipment and fit-out cost against loans near the midpoint, what the franchisor has disclosed, if a brand is used, and debt service coverage. Inclusion works county by county: a record is kept only if a county name from the project record turns up on the 2023 metro map.