Grocery Store Feasibility Study in Texas

Texas grocery: large loans, high floors

Texas grocery loans are large, and their median is the gauge that sets the Texas cell apart from both the Texas all-asset book and grocery lending nationally under our test. The median of 182 Texas approvals from FY2017 to FY2026 was $625,000, or 1.78x the national grocery median, and the interquartile range ran from $164,750 to $1.7 million. That range is wide, holding small convenience-format grocers at one end and full supermarkets with their buildings at the other. Texas approved $221.6 million in the class and ranks 5 of 55 among states, yet grocery is a smaller part of Texas SBA lending than of the nation's, with a 0.60x location quotient, and it ranks 17 of 39 among Texas classes.

Lending has accelerated. Texas grocery approvals were 8 in FY2017 and reached 29 worth $31.8 million in FY2025 and 30 worth $59.1 million in FY2026. SBA 7(a) carries 170 approvals and SBA 504 only 12. The Huntington National Bank holds 16 Texas loans worth $26.0 million, PNC Bank, National Association 12, Wallis Bank 8, and Bank of Hope and JPMorgan Chase Bank, National Association 7 each. Franchise grocers are 3.3% of loans.

What the Texas floors warn

Both floors are high, though neither clears our distinctness margin. Texas cancellations run to at least 16.3% of FY2017 to FY2024 grocery approvals, and the ceiling is the same 16.3%. Of 55 Texas grocery loans disbursed between FY2017 and FY2021, 10.9% are charged off so far, and all of that loss fell inside five years, at 10.9%. Those are floors on a cohort still repaying, and they describe a class in which deals fail both before funding and soon after.

What a Texas grocery study has to prove

A lender reading those floors will want hard evidence. Dallas County holds 27 approvals and Harris 26, followed by Travis at 16, Williamson at 13 and Tarrant at 12. The study must measure household food spending in the trade area, the national and regional chains already serving it, and the margin a store of this format can hold. Cost has to be bid, including refrigeration, shelving and any building work. Because early losses are high, the coverage test should be run on a slow ramp and a compressed gross margin, at the loan actually requested, which can reach $1.7 million. Any Texas real estate in the loan needs an appraisal that supports it as retail property apart from the grocery business. These are SBA loans only.