Coffee Shop Feasibility Study in Oregon

Very small loans for Oregon coffee shops

Oregon coffee shops borrow far less than the class does nationally. The median SBA loan to an Oregon coffee shop or snack bar was $57,600, only 0.24x the national median, and that typical size departs, beyond our distinctness margin, from both Oregon's lending across all classes and coffee shops nationwide. It is the defining feature of this cell. Oregon approved 114 of these loans for $21.5 million from FY2017 to FY2026, ranks 23 of 53 states, and places the class 7 of 39 inside the state. The location quotient of 0.91x puts coffee close to its national weight in Oregon's SBA lending, so the difference is the size of each loan, not the number.

The middle half of Oregon loans runs from $30,700 to $269,450: a working-capital line or espresso equipment at one end, a full café build-out at the other. SBA 7(a) carried 110 approvals and SBA 504 only 4. Franchise concepts account for 23.7%. Columbia Bank is the current holder of 24 loans worth $6.2 million, U.S. Bank, National Association holds 18 worth just $1.3 million, and Banner Bank and KeyBank National Association hold 11 each. Multnomah County leads with 25 approvals and Washington County has 21, then Lane with 11 and Clackamas and Jackson with 8 each; coastal Clatsop and Lincoln add 7 and 5. In FY2024 Oregon approved 13 loans that totalled only $470,200.

A clean record, with a caveat

Oregon coffee approvals in FY2017 through FY2024 were cancelled at a rate of at least 8.9%, and with nothing left undisbursed the ceiling is also 8.9%. Oregon has written off 0.00% of the 58 coffee loans it disbursed in FY2017 to FY2021, and 0.00% in their first five years too. Small loans carry small exposures, but the rate is still a floor on loans that remain open.

What an Oregon coffee study must test

A study for a coffee shop in Oregon should match the scale of the loan. Demand is a site question: foot and car traffic, drive-through potential, nearby offices, campuses or visitors in coastal towns, and how many cafés already compete within a few blocks in Multnomah or Washington County. Cost testing needs current quotes for equipment and leasehold work, since small loans leave little room for overruns. Debt service coverage should rest on realistic daily transactions and average ticket, with labor costs at current levels. For most of these loans there is no real estate to appraise, so the lender relies on the owner's equity, the lease and the business itself, and a loan near $269,450 needs a stronger cash flow case than one at the $57,600 median.