Grocery Store Feasibility Study in Tennessee

Underweight in Tennessee, close to the national loan size

Grocery stores in Tennessee draw fewer SBA loans than the national pattern would predict: the location quotient is 0.63x, the state is 30 of 55 by loan count, and the class is 17 of 39 among Tennessee's asset classes. The loans that do exist look much like the national norm, with a median of $310,600 at 0.88x the national median. From FY2017 to FY2026 SBA approved 27 loans worth $23.9 million, and the middle half, from $46,500 to $701,750, shows a wide spread between small and large deals.

Mix, lenders and places

SBA 7(a) made 23 of the loans, SBA 504 only 4. A franchise stands behind 7.4% of loans, so a minority are branded stores. U.S. Bank, National Association is first among 7(a) lenders for Tennessee groceries, with 7 loans for $541,000 in all, small loans on average. Davidson County has 8 of the loans, Williamson has 3, and Dickson, Montgomery and Putnam 2 each. The yearly count moved without a clear direction: 7 in FY2024, then 3 in FY2025 and 2 in FY2026.

Withheld outcomes

Tennessee groceries carry no published cancellation or charge-off rate, since the cohort has too few loans to give a dependable rate. Neither is a zero, and a lender should not read the gap as a good or a bad record.

Tests for a Tennessee grocer

A Tennessee grocer's study has to measure the household base inside a realistic shopping radius, the supermarkets, discounters and club stores already competing, and the store format the site can support. Grocery margins are thin, so the study should test sales per square foot, shrink, labour and rent against a break-even that a loan of this size must clear. The median loan suggests many Tennessee borrowers buy an existing store or open a small-format one rather than build a full supermarket, so the study should say which it is. Cost should include equipment such as refrigeration, which is large and specialised, and the loan payment should be tested against cautious sales and again with a rival opening nearby. Because an appraiser values the business as a going concern, the study should keep inventory and equipment apart from the real estate.