Grocery Store Feasibility Study in Washington

Washington grocers take larger loans

In Washington the grocery metric that stands out is loan size. The median SBA approval for a grocery store in the state is $463,000, or 1.32x the national grocery median, and that clears our distinctness margin against the class nationally and against Washington's median across every asset class. Grocers also hold a strong position in the state's lending: 157 approvals worth $131.0 million across FY2017 to FY2026, which places Washington 9 of 55 among states, a location quotient of 1.41x, and a place of 13 of 39 among Washington's classes.

Independent stores, a mix of lenders

Franchise share is just 1.3%, so this is independent grocery lending almost entirely. SBA 7(a) carried 144 loans and 504 carried 13, with Evergreen Business Capital holding 6 of the 504 loans. The 7(a) holders split into small and large ticket lenders: Columbia Bank's 15 loans total $1.6 million and Banner Bank's 10 total $1.7 million, while Readycap Lending, LLC's 14 come to $21.9 million and Open Bank's 9 to $11.1 million; U.S. Bank, National Association holds 11. Half the approvals fall between $175,000 and $1.1 million. King County leads with 33, Snohomish follows with 20 and Pierce with 17, and approvals reach well beyond the Seattle area, with 10 in Yakima County and 9 in Grays Harbor. FY2025 was the busiest year at 25 loans.

Outcomes

Both floors sit below grocery nationally. Cancellation claimed at least 8.5% of Washington grocery approvals in the FY2017 to FY2024 cohort, 9.4% at the ceiling. Charge-offs on 63 Washington grocery loans disbursed in FY2017 to FY2021 stand at a 3.2% floor, equal to the five-year share of 3.2%. Neither is distinctive, and both are floors.

A larger loan means a Washington grocery study is underwriting real exposure. Demand has to be measured as household food spending in the trade area and the share an independent store can take from chains and discounters nearby, which is often a question of format, ethnic or specialty focus, and convenience. Cost includes refrigeration, fixtures, inventory and any building purchase or renovation, at today's prices. Coverage of the debt should be built from sales the store can plausibly ring up and from grocery margins, tested against a downside where a competitor opens nearby. When the building comes with the store, the appraiser's view of a retail box in that location sets the collateral, and the study should give that view a sound income basis. In smaller markets, the study should also show the store's catchment is deep enough to sustain it.

These rates are cohort floors that can still rise as open Washington loans mature, and lender names reflect the current holder SBA reports.