Grocery Store Feasibility Study in Wisconsin

Larger Wisconsin grocery loans

Wisconsin grocery loans are large for the class: the median of $492,000 is 1.40x the national grocery midpoint, and Wisconsin's central half spans $173,000 to $1.0 million. The class has a location quotient of 1.14x in Wisconsin and ranks 14 of 39 there, and the state's 97 loans worth $74.4 million from FY2017 to FY2026 rank 14 of 55 among states. No figure differs from both Wisconsin lending as a whole and grocery lending across the country by the required margin.

The 504 side does heavy lifting

SBA 504 carried 24 of Wisconsin's 97 grocery loans, and WBD, Inc. holds 19 of them for $20.1 million, a large share of the state's grocery dollars. In 7(a) lending, Peoples State Bank holds 8 for $3.2 million, while CenTrust Bank, A Division of SmartBiz Bank National Association and Nicolet National Bank hold 5 each. Franchised stores account for 22.7%. Milwaukee County leads with 26 loans and Marathon follows with 10, with Columbia, Dane and Waukesha at 6 apiece. Approvals have been lumpy, from 16 in FY2021 to 4 in FY2024, and FY2022 was the strongest year for dollars, at 12 loans and $13.7 million.

Steady floors in Wisconsin

Of Wisconsin grocery approvals dated FY2017 to FY2024, at least 10.7% were cancelled, the same at the ceiling. Charge-offs reach 2.0% of the 51 loans funded FY2017 to FY2021, the five-year figure matching at 2.0%, and both stay floors while Wisconsin loans remain open. For a borrower, the larger ticket raises the bar on coverage, since a loan near $1.0 million needs steady volume to carry it.

A Wisconsin grocery study has to measure food spending in the trade area, the distance to the nearest competing supermarket or discounter, and the share the store can realistically capture. Cost covers building or purchase, refrigeration, equipment and opening inventory. Payment coverage for a Wisconsin store needs to hold at realistic margins after shrink and labour, with a sensitivity for a new competitor. The appraisal will judge the building as retail real estate; where a 504 loan from WBD, Inc. or another certified development company is involved, the study must show value that supports the first mortgage and the 504 piece together. No coding caveat applies to grocery stores.