Quick Service Restaurant Feasibility Study in the Austin-Round Rock-San Marcos, TX Metro Area

Quick service restaurant lending in Austin

SBA's records file 168 approvals for quick-service restaurants in Austin over FY2017 to FY2026, with $96.2 million in gross dollars approved. In rank terms, Austin is 30 of 779 across metro and micro areas, and fast food and counter-service restaurants place 2 among the 39 classes recorded locally. The median loan is $350,000, 1.13x of the national median for the class, for the record, so loans run larger here. Compared with the nation, fast food and counter-service restaurants fill about the same place of Austin lending, a location quotient of 0.95x. Smaller tickets cluster near $150,000; the larger end of the usual span reaches $656,250.

Who holds quick service restaurant loans around Austin

Under 7(a) lending, The Huntington National Bank leads at 22 ($6.5 million); next are Wells Fargo Bank National Association (11) and PNC Bank, National Association (8 loans). Franchise-affiliated borrowers make up 54.8% of quick-service restaurant approvals in Austin. Of the 168 approvals, 157 are 7(a) loans and 11 are 504 loans, as a matter of record, which tells us which SBA route fast food and counter-service restaurants borrowers tend to use around Austin. No 504 lender appears for limited-service restaurants in Austin on this page. Lender figures for quick-service restaurants in Austin are drawn from SBA's holder field: by the file, credit goes to the present holder, so these rows are no guide to lending standards.

Counties and years in Austin

Only one project county stands out for limited-service restaurants in Austin: Travis County, TX, at 85 approvals. Volume was highest in FY2017, with 28 approvals worth $8.8 million, and lowest in FY2019, with 8 approvals worth $8.3 million.

Rates that can only move up for limited-service restaurants

Austin should be viewed as a county-based figure: in this cell, SBA's recorded county, tied by name to 2023 boundaries, sets which approvals belong to Austin. Charge-offs stand at 14.5% to date among 69 disbursed Austin loans from FY2017 to FY2021, as a matter of record, a floor that can rise; 7.2% came within five years of approval. At least 14.2% of quick-service restaurant approved loans in Austin were cancelled once approved among FY2017 to FY2024 loans, a minimum; the matching ceiling is not printed.

Feasibility questions for fast food and counter-service restaurants around Austin

First of all, Austin demand has to be tested: brand strength if franchised, and breakfast against dinner sales. Lending history of 168 loans shows what institutions did for limited-service restaurants, and tells a reader little about a single address. A study must also show debt service coverage surviving a slower opening than planned, since some Austin loans fell through and some were written off. Cost comes next, including remodel and refresh duties and franchise fees and buildout, set against the Austin midpoint loan of $350,000. The appraisal deserves separate work: equipment against real estate, and franchise terms that limit resale.