Owner Occupied Retail Feasibility Study

Questions buyers ask

Who prepares a feasibility study for an owner-occupied retail building?

Loan Analytics does, with Daniel Smith, MAI signing the report. It is addressed to the lender rather than written as a sales document for the borrower: it is what a credit officer, and on a 504 loan the CDC, reads to decide whether a store can carry the debt on the building it occupies. That matters more here than in most asset classes, because the SBA's files hold no owner-occupied retail class to point to. A hardware dealer buying its own building is counted with hardware dealers, which this site does not track, and every other retailer is filed the same way under its own trade. A consultant who cites only a broad retail figure cannot tell a lender how loans like this one have performed. The study starts from the closest record instead: for a grocer, 3,701 loans under 7(a) and 488 under 504 since FY2017; for a liquor store, 6,438 and 302; for a building held to lease, 1,486 and 81, the class an owner-occupied store has to show it does not belong to. It states which record fits the borrower and why, then works through the trade area, the cost, the coverage and the collateral in that light.

Why does this page read grocery, liquor and lessor loans instead of an owner-occupied retail record?

Because the SBA classifies the borrower's business, not the way the business holds its building. A retailer that buys its store is filed under what it sells, so owner-occupied retail has no row of its own anywhere in the data. The three classes here bracket the question from both sides. Grocery and liquor stores are retailers that often finance the store and the operation together, and their records are deep enough to read, with 3,701 and 6,438 loans under 7(a) alone. The nonresidential lessor class sits on the far side of the line, buildings held to collect rent, with 1,486 loans under 7(a) and 81 under 504. Each brings a different lesson to a store the owner will occupy. The grocery record shows a perishable, low-margin trade, with a 7(a) charge-off floor of 7.6%. The liquor record shows a trade where a licence is part of what the buyer pays for, with a floor of 2.5%. The lessor record shows building loans repaid from rent, and how far SBA lending to them fell from FY2024, which the page attributes to eligibility. A study for a hardware, apparel or furniture retailer will not find its trade on this page, so it states which of these patterns apply to the borrower and which do not. The record also holds only SBA-guaranteed loans: a store financed conventionally, or a chain that never used the program, is not in it. For a conventional loan the study therefore uses these figures as a benchmark of how SBA lenders have sized and how such loans have performed, not as a count of the trade.

Is SBA 504 or 7(a) the better fit for buying my store building?

Both programs appear in this record, doing different jobs. By count, 7(a) dominates: grocers took 3,701 loans under it against 488 under 504, and liquor stores 6,438 against 302, so liquor stores lean on 7(a) even harder than grocers do. By size, 504 leads: the grocery median is $846,000 under 504 and $310,000 under 7(a), and the liquor median $555,500 against $440,000. The page reads that split as the programs' purposes showing through. A 504 loan finances fixed assets, the building first, while a 7(a) loan can also pay for the purchase of a business, its stock and its working capital, so the 7(a) rows can hold loans with no building in them at all. The lessor class, where the building is the whole deal, shows the two medians almost meeting, $597,000 under 7(a) and $602,000 under 504; its 7(a) median is the largest 7(a) median on the page. The grocery 504 median of $846,000 is the largest of all, so a grocer's building loan is not small even beside investor buildings. The choice of program belongs to the borrower and the lender, but it changes what the study must prove. In a 504 project the study has to show where the inventory and working capital will come from, because the debenture will not carry them. In a 7(a) loan that also buys an operating store, the study has to separate the price of the building from the price of the business and any licence, since the appraisal supports only the first.

What will my lender expect an owner-occupied retail feasibility study to show?

Answers on occupancy, demand, cost, coverage and collateral, roughly in that order. Occupancy comes first because this page's lessor record shows what happens to SBA lending on buildings held for rent: 7(a) approvals to lessors went from 179 in FY2023 to 29 in FY2024 and 6 in FY2025. The study measures the store's own floor area against any space let to others, from plans or a rent roll. Demand comes next: the trade area, the competitors in it, including big-box and online sellers, and the store's own sales record where it already trades. Cost covers the price or the construction, the renovation, the fixtures and the stock needed to fill the floor. Coverage is computed on the store's earnings after the owner is paid and is tested in a poor sales year, not only an average one. Collateral is the building's worth to another retailer. Each answer has a figure on this page behind it. Cancellation floors between 12.5% and 27.2% show how often approved loans in these classes never fund; charge-off floors, from 0.00% on every 504 row to 7.6% on grocery 7(a), show where funded loans have failed. A study that answers in this order lets the lender see which of those outcomes the project sits nearer to.

How much does an owner-occupied retail feasibility study cost?

Published ranges are the honest guide, and this site's 2026 fee survey collects them from the providers that post their fees. It finds single-site SBA studies priced from $5,000 to $12,500; more involved work, such as an unusual concept, multiple sites or a building delivered in stages, from $10,000 to $25,000; while a study held to USDA's fuller standard starts at $7,500 and can pass $18,750. Those ranges are labelled directional by the survey itself, which names no retail band of its own and reports that the SBA does not set or limit the fee, so none of this is a quote. It names scope first among what moves a price within a band: buying an operating store with its own financial statements takes less work than building a new one with no history to read. For an owner-occupied store, the parts of the scope that move the fee are the occupancy split, any space to be let to others and the rent evidence it needs, a move from a leased location, and, for a liquor store, the licence. The survey also reads the fee against the loan rather than on its own, and this page's medians show why: a fee in the single-site band weighs far less on a building loan near the grocery 504 median of $846,000 than on a 7(a) loan near the grocery median of $310,000. The fee for a given store comes back with the reply to the scope request, once the project is described.

How long does an owner-occupied retail feasibility study take?

This page publishes no fixed turnaround, and a quoted time that ignored the project would not mean much. What sets the timeline is the evidence the lender needs and how much of it already exists. A store that already trades and is buying the building it occupies brings its own sales history, which shortens the demand work; a store moving to a new building has to show that its customers will follow, and a new store has no history at all. Space let to other tenants adds rent and vacancy evidence. A liquor store adds the licence. A grocer moving into a building that needs new refrigeration adds equipment quotes. Construction adds a cost review and a ramp from opening. The reply to a scope request sets the timeline against the lender's deadline, and that deadline is worth stating up front. Cancellation floors on this page run from 12.5% on grocery 7(a) approvals to 27.2% on lessor 504 approvals; the SBA files do not record why those loans failed to close, but a study delivered before the credit decision leaves fewer questions open between approval and funding.

Will the SBA or my lender insist on a feasibility study for a store purchase?

Not automatically. As this site's 2026 fee survey reads it, SOP 50 10 8 leaves the request to SBA's discretion, for cases where the agency wants a clearer view of the business type and the local market. The circumstances it names are a market already saturated with the same industry, an unusual market concept, property highly specialized to its use, a project oversized for the community around it, and fast growth that brings new, unseasoned debt. Separately, many lenders call for a study by their own policy, typically for start-ups and special-purpose real estate. For a store owner, the circumstances to read closely are specialized property, since a building fitted closely to one trade may be hard to let to the next, and saturation, since a lender will want to know how many competitors already serve the trade area. This page adds one more reason a lender asks. A store that lets part of its building edges toward the lessor class, where SBA 7(a) lending fell from 321 loans in FY2021 to 6 in FY2025, and the lender will want the occupancy question settled in writing before it relies on the guarantee.

Is a grocery store loan riskier than a liquor store loan?

Under 7(a), the record says so. Among 7(a) loans disbursed between FY2017 and FY2021, grocers have a charge-off floor of 7.6% and liquor stores one of 2.5%. Under 504 both trades show 0.00%. These are floors: they count only the loans charged off so far, a younger loan has had less time to fail, and the page prints no rate for a cohort under 30 loans. Two readings follow for a study. First, the gap sits in the program that also funds business purchases and working capital, not in the 504 loans tied to a building, so the record does not show a grocer that owns its building through 504 carrying the grocery 7(a) loss pattern. Second, the order reverses on cancellation: liquor stores lose more approvals before funding, 12.6% under 7(a) and 15.5% under 504, than grocers do, at 12.5% and 13.3%. A grocery study spends its effort on margin and on sales under pressure, where the 7(a) record has failed; a liquor store study spends more on what can stop a closing, the licence first. For comparison, the lessor 7(a) floor of 0.82% sits below both store trades: loans repaid from rent on investor buildings have so far failed less often than loans repaid from store sales. That does not make a store owner's loan safer for holding the building, since the debt is still paid from the store, and the study tests the store. A retailer in another trade can be read against whichever of the two store patterns its margins and its approval path resemble.

What do the cancellation floors on this page mean for a buyer?

A cancellation is an approved loan that never funded, and the page counts approvals from FY2017 to FY2024, so the floors say nothing yet about FY2025 and FY2026 lending. In every class here the 504 row cancels more than the 7(a) row: 13.3% against 12.5% for grocers, 15.5% against 12.6% for liquor stores, and 27.2% against 16.2% for nonresidential lessors, the highest floor on the page. The pattern is telling. For grocers the two programs sit close together; for lessors the 504 floor stands far above the 7(a) floor, so the risk of an approval that never closes is heaviest where the building is let rather than occupied. The SBA files do not say why a loan was cancelled, and a study cannot claim to know. What it can do is settle the questions still open when a 504 loan is approved: whether the appraisal supports the building price, whether the occupancy split holds up, where the inventory and working capital will come from given that the debenture finances fixed assets, and, for a liquor store, whether the licence will pass to the buyer. The lessor figure is the warning for any owner-occupant who plans to let part of the building. A project that reads like a landlord's can win an approval and still fail to close, and at least 27.2% of lessor 504 approvals ended that way. The study's job is to make the store's case before approval so that the approval holds.

Can I lease part of my store building to other tenants and still use SBA financing?

The answer turns on how much of the building the store itself uses, and this page shows why a lender will press the point. The nonresidential lessor class, buildings held to earn rent, ran steadily under 7(a) before FY2021, between 148 and 196 loans a year, then took 321 loans for $325.2 million in FY2021 and 179 in FY2023. Then the series collapsed: 29 loans for $43.4 million in FY2024, 6 for $1.3 million in FY2025 and 20 for $3.7 million in FY2026. The 504 side fell from 11 loans in FY2023 to 3 in FY2024, and the table records none in FY2025 and none in FY2026. The page attributes the fall to eligibility, since the SBA treats most landlords as passive businesses. A store that keeps some space let to others is not a landlord, but the larger the let share, the harder a lender will look at whether it is financing an operating business or a rental property. The site's worked example faces exactly this: a hardware retailer moves into the vacant anchor space of a multi-tenant retail building, keeps the remaining suites leased, and documents the occupancy split against 13 CFR 120.131(b). A study for such a project measures the store's floor area against the let area, carries the tenant rent as a separate line with its own evidence, and does not let that rent prop up coverage.

Which states have the most SBA grocery store loans?

California leads with 749 loans for $688.7 million, and New York follows with 551 for $497.9 million; every other state in the table has 187 or fewer. Below those two, the order by count and the order by dollars part ways, and the gap is useful to a lender. Florida and Michigan each have 187 loans, but Florida's add up to $239.6 million and Michigan's to $168.9 million. Texas, with 182 loans, has $221.6 million. Ohio's 177 loans total $66.9 million and Massachusetts's 144 total $49.4 million, while Georgia's 118 reach $137.0 million, more than Washington's $131.0 million on 157 or New Jersey's $121.5 million on 164, and Utah's 39 reach $47.7 million. Wisconsin's 97 loans total $74.4 million, again more than Massachusetts on fewer loans. Puerto Rico appears with 100 loans for $19.1 million, less money than Maine's 35 loans at $22.6 million, and Arizona's 27 loans, at $28.2 million, edge past Connecticut's $27.6 million on 67. New Hampshire's 28 loans total $8.3 million, the smallest dollar figure in the table. The same count can stand for very different loan sizes from one state to the next. A study for a grocer buying its building therefore sets the proposed loan against its own state's row as well as the national medians, and explains a loan that sits well above what that row suggests. A state missing from the table is not a state with no grocery loans; the table simply ends at the rows of 27.

Which states lead SBA liquor store lending?

California has the most loans, 1,227 for $740.1 million, but Georgia has the most money: 467 loans for $977.7 million, the largest dollar total in any state table on this page. Colorado is second by count with 690 loans and $531.0 million, a notable place for a state with only 30 grocery loans. New York's 570 loans total $270.0 million, less than New Jersey's $452.2 million on 460. Illinois and Texas tie at 275 loans, with $214.8 million and $210.4 million. The District of Columbia, at 94 loans for $60.1 million, matches Indiana's count, though Indiana's total is $82.3 million. Toward the foot of the table, Oregon's 42 loans total $10.6 million, the smallest dollar figure in it, while Arizona's 34 reach $29.7 million. That spread means liquor loans are sized very differently from state to state, and a buyer of a liquor store building should expect the lender to ask why the loan sits where it does against its state's row. The study answers by separating what the price pays for, the building, the business and the licence, so the lender sees how much of it the real estate can support. Set beside the grocery table, this one leans toward different states. Connecticut has 247 liquor store loans against 67 grocery loans and Maryland 219 against 50. Washington runs the other way, with 157 grocery loans and 29 liquor store loans, and Florida has more grocery loans, 187, than liquor store loans, 134. Kansas, with 81 liquor store loans, and the District of Columbia do not appear in the grocery table, and Puerto Rico, with 100 grocery loans, does not appear in this one. Which trade a state's SBA lenders see most often shapes the files a proposed loan will be compared with. The table stops at Delaware, with 28 loans and $16.4 million; a state below that line is not shown as having none.

Where were SBA loans to retail and other investor buildings made?

California leads again, with 222 lessor loans for $307.9 million, and Texas is second with 129 for $162.2 million, a higher place than Texas holds for grocers, where it is fifth with 182 loans, or for liquor stores, where it ties Illinois at 275. Below them the order does not follow the store tables. Ohio is third with 71 loans and $51.3 million and Minnesota fourth with 68 and $34.1 million, while New York, second for grocers and third for liquor stores, has 55 lessor loans for $38.0 million. Colorado's 61 loans total $71.2 million, more than Florida's $67.4 million on 64 loans or Ohio's total on 71, and Washington's 50 loans reach $62.4 million. The class mixes flex, office and retail buildings, and banquet hall rental shares its code, so it is not a retail-only record, and most of it is older lending made before 7(a) approvals to lessors fell to 29 in FY2024. Its 504 side was never large: the best year by count was FY2018, with 17 loans for $13.6 million, and the best by dollars FY2021, with 8 loans for $16.6 million. For an owner-occupant the table is not a guide to what a lender will approve now. Its use is narrower: it shows where SBA lenders have already underwritten retail and similar buildings on rent, the same test an appraiser applies when valuing a store building as if it were let to another tenant, and the test a study's collateral section has to support with local rent and sale evidence.

How has SBA grocery store lending moved year by year?

Under 7(a), the count dipped before it recovered: 412 loans in FY2017, 373 in FY2018, 299 in FY2019 and 288 in FY2020, the low of the series, then 397 in FY2021 for $407.4 million, the largest dollar year. That FY2021 count stayed below FY2017's 412 even as dollars reached the series high, which points to bigger grocery loans that year. FY2019 was the smallest dollar year, at $167.4 million. Counts since FY2021 have held between 324 and 429, with 429 reached in both FY2023 and FY2025, and FY2025 brought $353.4 million, the second-largest dollar year. FY2026 closed at 357 loans for $325.9 million. The 504 series moved more sharply. It fell to 28 loans in FY2018, rose to 72 in FY2021 and reached its dollar peak of $90.6 million in FY2022 on 62 loans; since then the count has held between 46 and 62, and FY2026, with 46 loans, still totalled $83.3 million, the second-highest 504 year. The 504 grocery record leans toward the recent years: every year from FY2021 on has more dollars than any year before it. For a grocer buying or building its store, that means the lender and the CDC have recent files of the same kind to compare against, and they will read the study's cost and loan size against those, not against FY2017 levels. It also means the 0.00% charge-off floor on 504 grocery loans rests on loans disbursed from FY2017 to FY2021, before the series reached its largest dollar year in FY2022, so the study cannot lean on it as proof of low risk.

How has SBA liquor store lending moved year by year?

Liquor 7(a) lending is the largest series on this page and the most uneven. It slid from 747 loans in FY2017 to 530 in FY2020, jumped to 800 loans and $708.6 million in FY2021, the largest single-year dollar figure anywhere on the page, fell back to 533 in FY2022, and has since moved between 531 and 748: 748 loans for $561.3 million in FY2025, then 531 for $484.9 million in FY2026. FY2018 was the smallest dollar year, at $351.4 million. Dollars have held up better than counts, and every year from FY2022 on carries more dollars than any year from FY2017 to FY2020. The 504 series is small: 15 loans in FY2019 at its low, 46 in FY2021 at its high, and a dollar peak of $44.2 million in FY2022 on 40 loans. Since then it has moved between 22 loans, for $21.8 million in FY2023, and 36, for $31.7 million in FY2024; FY2026 brought 28 loans for $27.1 million. Liquor stores borrow under 7(a) far more often than under 504. When a 7(a) loan pays for the business as well as the building, the study has to set the building's value apart from the rest of the price, because that is all the appraisal will carry. Where the borrower takes 504 for the building, it joins a program row with a 15.5% cancellation floor, so the study is best finished before the CDC's approval, not after it.

Which SBA loans for store buildings are still being made?

The FY2026 rows answer it. Liquor stores took 531 loans under 7(a) for $484.9 million and 28 under 504 for $27.1 million. Grocers took 357 under 7(a) for $325.9 million and 46 under 504 for $83.3 million. The nonresidential lessor class took 20 loans under 7(a) for $3.7 million and none under 504, as in FY2025. The owner-operated trades remain active in both programs while the landlord side has all but closed. Between the two retail trades, liquor stores lead under 7(a) in FY2026, but grocers lead under 504 by both count and dollars, in line with the larger grocery 504 median of $846,000. The grocery 504 total of $83.3 million is the second-largest in its series, while the liquor 504 total of $27.1 million sits in the middle of its own. For a store owner the practical reading is that SBA lenders and CDCs are still writing loans on retail buildings when the borrower runs the store, and have nearly stopped when the borrower collects the rent. One year stands apart in every series here. FY2021 is the largest dollar year in all three 7(a) series and the largest count year for liquor store and lessor 7(a) loans, and under 504 it is the largest count year for grocers and liquor stores. The years since are the better yardstick for a loan made now, and a study that compares the proposed loan with recent lending uses them rather than that peak. This page counts loans by program, year and state; it does not rank lenders, so it names none. The grocery store, liquor store and flex space pages linked from here carry each class on its own.

What does the study test about demand for a store the owner will occupy?

It tests whether the store can hold enough of its trade area's spending to pay for a building it now owns rather than rents. That starts with the trade area itself: the households within reach, the competitors already serving them, and the big-box and online sellers that set a ceiling on any independent's share. For a store that already trades, its own sales history is the best evidence there is, and the study reads it month by month, because a move can lose customers who do not follow. For a new store the study has to build sales from the market, and it says so. The trade changes the emphasis. The grocery record, with a 7(a) charge-off floor of 7.6%, is the reason a grocery study tests sales under pressure and the margin on perishables rather than a single average year. The liquor record, at 2.5%, points the effort toward the licence and the competing sellers of the same products. A state's place in this page's tables says something only about lending: California's 749 grocery loans and Colorado's 690 liquor store loans show that lenders there know the trade, not that the market has room for one more store. The reverse holds too. Where a state sits low in a trade's table, as New Hampshire does with 28 grocery loans or Oregon with 42 liquor store loans, the lender has fewer SBA files in that trade to compare with, and the study's own market evidence carries more of the weight. The study measures room directly in either case.

Is debt service coverage measured on the store's earnings or on rent?

On the store's earnings. When the borrower occupies the building, the loan is paid from what the store earns once the owner has drawn a salary; rent between the owner's own companies moves money from one pocket to another and proves nothing. That is the clearest difference between this study and an investor's. The lessor class on this page, 1,486 loans under 7(a) at a median of $597,000 and 81 under 504 at $602,000, is the record of loans repaid from rent, and a lender reads an owner-occupied store differently. Where part of the building is let, the tenants' rent comes in as a separate line, counted conservatively, with its own vacancy allowance. The test is a weak sales year, not an average one. The grocery 7(a) charge-off floor of 7.6% and the liquor 7(a) floor of 2.5% show where store earnings have already fallen short of debt service; the 0.00% floors on all three 504 rows show no charge-off so far among loans with a building behind them. The site's worked example sets out this split, presenting coverage as a result of store sales, testing it against lower sales and higher costs, and converting it into the break-even sales a lender can compare with the store's history.

How does the appraisal fit with the feasibility study on an owner-occupied store?

They answer different questions about the same building. The appraisal prices the real estate from sales of comparable buildings and from market rent, since a lender that has to take the building back will sell or let a store, not a business. The feasibility study supplies the evidence the appraiser and the lender both need about the business and the space: how much of the building the store uses, what it would rent for to another retailer, and which parts of the cost are building and which are fixtures and fit-out that serve only this trade. The medians on this page show why that split matters. A grocery 504 loan has a median of $846,000, against $555,500 for liquor stores and $602,000 for lessors, and a grocery fit-out carries refrigeration and cases built for the trade. A building fitted closely to one retailer is worth less to the next, so the study names those features and estimates what a general retail tenant would pay. In a 504 structure like the worked example's, a first-lien bank loan and a CDC debenture both rest on that value, so both lenders read this part of the study. For a liquor store, the licence sits outside the real estate altogether and has to be valued apart from it. The site's worked example closes with a collateral check of this kind, valuing the store space as if it were let at market.

Is there a worked example of an owner-occupied retail feasibility study?

Yes. The site's worked example of an SBA 504 owner-occupied retail study is set in Michigan, in the Macomb County submarket of Metro Detroit. An established independent hardware and home-improvement retailer buys an existing multi-tenant retail building, moves its store into the vacant former anchor space and keeps the small suites leased, financed by a bank first lien, a 504 debenture through a CDC and the owner's cash. It works through the submarket's retail statistics, the cost basis and sources of funds, a revenue build that keeps store sales and suite rent apart, the ramp through the move, the operating statement, coverage and its sensitivity, break-even store sales, the program rule checks and a collateral check at market rent. It is an illustration, not a client engagement, and none of its figures enter any track record. Michigan is a fair setting for it on this page's record: the state has 187 grocery loans for $168.9 million, level with Florida behind California and New York; 397 liquor store loans for $252.5 million, sixth in that table; and 39 lessor loans for $30.8 million. The patterns a store owner's study reads are all present there. A real study replaces the example's assumptions with the borrower's own sales, leases and bids.