Grocery Store Feasibility Study

Questions buyers ask

Who can prepare a grocery store feasibility study my lender will accept?

A consultant who is independent of the buyer, the seller and the contractor, so the credit officer can treat the report as evidence rather than as a sales document. Loan Analytics writes grocery store studies for 7(a) and 504 lenders, for banks seeking a USDA Business and Industry guarantee and for conventional loans, and Daniel Smith, MAI puts his signature on each grocery study. Every study measures the project against this page's SBA grocery record, which counts 3,701 7(a) loans and 488 504 loans for FY2017 to FY2026, and then against the state, metro and lender rows wherever those rows hold enough loans to carry a median or a floor.

Will my lender require a feasibility study before approving a grocery store loan?

Lenders decide that under their own credit policies and the facts of the deal, and the tables on this page do not record which loans had a study. What the record does show is why grocery requests get a close reading. The 7(a) grocery charge-off floor is 7.6% on the FY2017 to FY2021 cohort; the cancellation floors are 12.5% for 7(a) and 13.3% for 504; and the state charge-off floors reach 13.2% in Illinois, 12.9% in New Jersey and 12.8% in New York. A buyer who brings a study answers the lender's questions about sales, margin and cost before they are asked.

How much does a grocery store feasibility study cost?

Our 2026 fee survey of providers, posted on this site under the title SBA Feasibility Study Cost in 2026, is the source here. For a single site on a standard special-purpose asset, published provider fees run from $5,000 up to $12,500; complex projects, such as several sites under one concept or construction delivered in phases, run from $10,000 up to $25,000. The survey does not name grocery stores in either band, so the fee for a particular store follows its scope: the purchase of an operating store with its own history, a new store with none, or a request covering several stores. Loan Analytics prices each grocery study in its reply to the scope request, alongside the timeline.

What other reports will the lender order, and what do they cost?

Beside the study, a grocery file usually carries other third-party reports, and the same 2026 fee survey on this site records what providers publish for them. Appraisal fees are published at $2,500 to $7,500 for a routine assignment, rising to $15,000 when a going-concern special-purpose valuation is needed. Buying an operating store adds a business valuation, published at $1,800 to $7,000. Environmental work up to a Phase I, where the lender requires one, is published at $2,000 to $6,000, and title and survey come to $2,000 to $5,000. Closing guides from lenders, cited in the survey, put a typical SBA acquisition's third-party bill, before the guaranty fee, at $12,000 to $25,000. For a grocery store the study and the appraisal should agree on how value divides between the building and the cases, refrigeration and stock.

How long does a grocery store feasibility study take?

No turnaround appears anywhere on this page, and we do not promise one before seeing the project. The timeline comes back with the scope, set against the date your lender needs the report. What moves it for a grocery store is the fieldwork: how many competing supermarkets, discount grocers, dollar stores and specialty markets the trade area holds, since each is visited and placed; whether a building is being bought or built, which adds a cost and value review; and whether the store sits where the SBA grocery record is thin, from Kansas to West Virginia in the state table, so that fieldwork has to stand in for a state rate.

What does a grocery store feasibility study test?

It starts with the households the store can draw on, sets the trade area by drive time and competition, and measures how much of their grocery spending the store can take from the supermarkets, discount grocers, dollar stores and specialty markets already there. It then builds sales per square foot, gross margin department by department and shrink on produce, meat, dairy and bakery, because a small slip in margin wipes out a grocer's cash flow. Cost covers refrigeration, freezer and display cases, a generator and the opening inventory. Coverage is tested with a new competitor in the trade area. At the $310,000 7(a) median the sales model carries most of the case; at the $846,000 504 median the cost and value sections carry as much.

Is a study for buying an existing grocery store different from one for a new store?

The emphasis shifts. For a purchase, the study starts from the store's own sales, margin and shrink history and tests whether they survive the change of owner and the new debt; for a new store, it has to build sales from the trade area up, with a ramp to stabilized volume. This page's figures show the split in size: the 7(a) grocery median is $310,000 and its lower quartile $100,000, while the 504 median is $846,000 and its upper quartile $1.6 million. A request well above the 7(a) median with no building behind it needs the study to explain where the extra money goes.

Which SBA program finances more grocery stores, 7(a) or 504?

7(a), by a wide margin in count: 3,701 grocery loans from FY2017 to FY2026 against 488 under 504. The 504 loans are larger, at a median of $846,000 against $310,000, and their lower quartile of $437,250 already sits above the 7(a) median. California has the most 504 grocery loans, 112, then Florida with 37, New York with 27 and Wisconsin with 24. In New York, 524 of the 551 grocery loans went through 7(a). We write the study for the program in the file, because 7(a) and 504 put the weight of the review in different places.

What loan amounts do grocery stores usually borrow under SBA programs?

Most 7(a) grocery loans are small and most 7(a) grocery dollars sit in large loans. Under 7(a), 1,370 grocery loans are for $150,000 or less, and as a group they hold only $96.5 million, while the 383 loans in the band just under the top hold $1.24 billion. Medians move with place: $100,000 in Ohio, Massachusetts and Connecticut, $581,000 in California and $763,000 in Utah; among metros, $50,000 in Columbus and $1.6 million in Orlando-Kissimmee-Sanford. The study sizes the request against the row closest to the store, not against the national median alone.

How often do SBA grocery store loans go bad?

The 7(a) charge-off floor for grocery stores is 7.6% for the FY2017 to FY2021 disbursement cohort, and 3.8% of 7(a) grocery loans were charged off within five years; 504 shows 0.00% on both measures. All of these rates are floors, counting the losses booked so far, and the page prints none for a cohort below 30 loans. By state the floors run from 0.00% in Florida and Minnesota to 13.2% in Illinois; by metro, from 6.2% in Los Angeles-Long Beach-Anaheim to 14.1% in New York-Newark-Jersey City; and among lenders, TD Bank, National Association shows 24.4%.

How often does an approved grocery store loan fall through before closing?

Cancellation floors on FY2017 to FY2024 approvals are 12.5% for 7(a) grocery loans and 13.3% for 504: at least that share never funded. The state floors range widely: 21.1% in Maryland, 20.0% in New York, 16.7% in New Jersey and Utah and 16.3% in Texas, down to 5.0% in North Carolina and 2.2% in Ohio. The record does not give the reasons. A study narrows the ones a buyer can control by testing the cost budget, the value an appraisal is likely to support and the source of the equity before the lender commits.

Where in the country are SBA grocery store loans concentrated?

California is first, 749 loans for $688.7 million from FY2017 to FY2026, and New York second, 551 for $497.9 million. Florida and Michigan follow at 187 loans each, Texas at 182, Ohio at 177, Illinois at 174, New Jersey at 164, Washington at 157 and Pennsylvania at 153. By dollars, Florida's $239.6 million and Texas's $221.6 million rank third and fourth, ahead of Michigan's $168.9 million. At the thin end, Wyoming has 5 loans, New Mexico 4 and West Virginia 2, and a study there leans on the trade area rather than the state record.

Which metro areas see the most grocery store loans?

By loan count the New York-Newark-Jersey City metro is first, with 559 loans and $534.4 million. Los Angeles-Long Beach-Anaheim follows with 269 loans and $206.0 million, then San Francisco-Oakland-Fremont with 149, Chicago-Naperville-Elgin with 142, Boston-Cambridge-Newton with 116, Philadelphia-Camden-Wilmington with 107 and Detroit-Warren-Dearborn with 95. San Juan-Bayamón-Caguas appears with 62 loans. Metro medians range from $50,000 in Columbus to $1.6 million in Orlando-Kissimmee-Sanford, so the metro row, where there is one, is the first benchmark a study for a store in that metro uses.

Which banks make SBA loans to grocery stores?

The Huntington National Bank has the most grocery loans on this page, 241 for $92.4 million, then TD Bank, National Association with 181 and U.S. Bank, National Association with 125; Manufacturers and Traders Trust Company and Bank of Hope share fourth place at 119 each. By dollars NewBank leads with $166.5 million on 107 loans, followed by Metro City Bank with $139.9 million on 81. The table runs down to Lendistry SBLC, LLC at 26 loans and lists no lender with fewer than 5. A study written for one of these lenders is read against that lender's own grocery book.

Is SBA lending to grocery stores rising or falling?

Loan counts are far below their peak while dollars sit near their high. 7(a) grocery approvals reached 1,015 in FY2005; FY2025 had 429 and FY2026 had 357. Dollars went the other way: the 7(a) record is $407.4 million in FY2021, and FY2025 ($353.4 million) and FY2026 ($325.9 million) rank second and third. On the 504 side the dollar record is $90.6 million in FY2022, and FY2026's $83.3 million ranks second. Lenders are financing fewer grocery projects than in the mid-2000s, at larger sizes, and a study is expected to carry evidence in proportion.

My state has too few grocery loans for a rate. What will the lender compare my project to?

The state's own row comes first, even without a rate. The states from Maine (35 loans, median $228,000) to Tennessee (27 loans, median $310,600) show loans, dollars and a median but no floor, as each cohort there is smaller than 30 loans; from Kansas (22 loans, $17.0 million) to Wyoming (5 loans) only loans and dollars appear. New Mexico and West Virginia show a loan count alone, 4 and 2, with no dollar total beside it. Puerto Rico's 100 loans for $19.1 million are in the page's original state list. In all of these places the study uses the national floors, 7.6% for 7(a) and 0.00% for 504, says that it does, and puts its weight on the trade area and the store.

My store also sells fuel, or is closer to a convenience store. Does this record apply?

Only if the loan carries a grocery store industry code. SBA's files assign each loan to a class through the borrower's industry code: a business coded as a convenience store, or a fuel station that also sells groceries, falls in a different class on this site and is not among the 3,701 7(a) and 488 504 grocery loans here. Grocers that borrow without an SBA guarantee, chains included, are outside the record altogether. The study benchmarks against the class that code places the loan in, and where a store straddles classes it says which record it uses and why.

Can the same kind of study serve a USDA Business and Industry grocery loan?

Yes: Loan Analytics also writes grocery studies for B&I lenders, alongside its SBA and conventional work. The tables on this page count SBA 7(a) and 504 loans only, so for a B&I grocery project the SBA record is the outside comparison: the national 7(a) floor of 7.6%, the state row and the nearest metro. The 2026 fee survey on this site records published ranges of $7,500 to $18,750 and above for studies that follow 7 CFR Part 5001.