Coffee Shop Feasibility Study in Montana

Montana coffee: the small median is the distinctive part

Montana's coffee shop and snack bar lending separates itself on loan size. SBA approved 40 loans between FY2017 and FY2026, worth $9.1 million, and the median of $132,900 is only 0.55x the figure for coffee shops nationally. The median is the metric that differs from both Montana lending generally and coffee shops nationally. With a location quotient of 1.25x, coffee outweighs its national weight in Montana lending, coffee sits 6 of 39 in the state ranking, and Montana ranks 42 of 53 on volume. In short, few loans, small ones, but a relatively important class.

Programs, brands and lenders

Loans in the middle half range from $50,500 to $270,750. The 7(a) programme carried 39 and 504 carried 1. Franchise brands account for 22.5% of loans. Glacier Bank has 7 loans worth $521,100 and First Interstate Bank has 5 worth $826,900, so those two banks hold a visible part of the class. Yellowstone County has 13 loans, Gallatin 8 and Flathead 6, followed by Lewis and Clark with 3.

Cancellations, losses and a lumpy record

For approvals made in FY2017 to FY2024, Montana coffee carries a cancellation floor of 0.00%, and the ceiling matches it. As a floor that is a clean reading, though in a class this small a single cancellation would change it. Montana coffee has no published charge-off rate, as under 30 loans were disbursed in that cohort; no number appears and we do not claim zero losses. Annual volume has gaps: no loans and $0 in FY2019 and FY2023, against 9 loans in FY2021 and $2.0 million in FY2026.

What a Montana coffee study must test

A study has to establish demand from resident traffic, nearby employers and the trade area, and the study should show debt service coverage in the slowest months, not only on an annual average. Budget the build-out and equipment against a median near $132,900, and test whether a franchise's required remodels, royalties and marketing fees fit the revenue. An appraisal for a small going concern rests on the lease and trailing sales, so a startup projection should be conservative and documented.