Grocery Store Feasibility Study in the Los Angeles-Long Beach-Anaheim, CA Metro Area

Second nationally for grocery loans

Among all metro and micro areas, Los Angeles and neighbouring Orange County stand 2 of 412 on grocery store lending, with 269 loans approved from FY2017 to FY2026 and $206.0 million in gross dollars. Locally the class sits at 10 of 39, and a location quotient of 1.28x shows groceries taking more than the national share of lending. Median size is $475,000, 1.35x the class midpoint nationwide, with the quartiles at $174,000 and $826,000. None of the loans are franchised, recorded at 0.00%.

Program mix and lenders

Of the 269 loans, 237 are SBA 7(a) and 32 are SBA 504. Business Finance Capital is the one 504 holder listed, with 14 loans worth $16.2 million. Bank of Hope heads the 7(a) list at 38 loans and $14.9 million, then United Business Bank at 19 and $10.8 million, PCB Bank at 16 and $11.1 million, Hanmi Bank at 16 and $10.4 million, and American Continental Bank at 12 and $7.1 million. The table is bookkeeping on who carries the loans; no borrower should take it as a view of lender practice.

Places and years

Los Angeles County has 230 loans in this cell and Orange County 39. The yearly series is uneven and worth a look before a lender leans on the full-period total. FY2024 shows only 16 loans and $7.5 million, while FY2026 reaches 33 loans and $35.1 million, the largest dollar year in the record, so a study should read the recent years and not only the total.

Outcomes and the study

Floors first: 11.1% cancelled among FY2017 to FY2024 approvals, and 6.2% charged off among the 130 loans disbursed in the FY2017 to FY2021 cohort. Loan Analytics keeps back two further rates, the ceiling on cancellation and the charge-off rate over five years, for want of loans, and missing is no zero. Counties reach the area through a name match to the 2023 metro map. For a grocery store, the study should test the shopper base within walking and driving range, the product mix that the store will carry, lease cost and build-out for refrigeration, supplier terms, debt service coverage at the loan range above, and the appraisal.