Quick Service Restaurant Feasibility Study in Colorado

Colorado's fast-food loans: fewer, but larger

In Colorado, limited-service restaurants are a large part of SBA lending, placing 3 of 39 among Colorado classes, yet the location quotient of 0.83x says they are a smaller part of it than they are nationally. The state ranks 16 of 54 for quick-service loans, with 462 approvals worth $233.5 million over FY2017 to FY2026. Colorado's loans run above the class norm: the median is $367,850, 1.18x the national median for limited-service restaurants, with the middle half between $150,000 and $600,000. That gap is not flagged against both Colorado's all-industry lending and quick-service lending nationally, so it should be checked against the specific concept and site rather than assumed.

Franchise systems and Colorado lenders

Franchised restaurants took 51.7% of loans. SBA 7(a) carried 432 loans and SBA 504 carried 30. The Huntington National Bank holds 54 loans worth $11.7 million, SouthState Bank, National Association 25 worth $13.3 million, and Live Oak Banking Company 17 worth $12.2 million. B:Side Capital leads the 504 lenders with 14. Denver County leads with 77 loans, then El Paso with 61, Arapahoe with 57 and Larimer with 40. FY2024 and FY2025 each brought 63 loans, the high for the decade.

Late losses and what a study must show

The charge-off record has a shape worth noticing. Of the 195 Colorado loans whose funds went out in FY2017 to FY2021, 7.2% have been charged off so far, but only 2.6% failed inside the first five years, meaning a good share of the losses came later in the life of the loan. Both figures are floors. Cancellation took at least 12.3% of approvals from FY2017 to FY2024, and 13.7% on the ceiling that adds undrawn loans. So a Colorado quick-service study should test demand beyond the opening year: traffic counts and access, daytime population, and the competing drive-throughs on the same corridor. It should cost the build-out or conversion against the brand's standards, model sales and margins through a remodel cycle, and keep debt service coverage above water in a softer year three. Where the land or building is financed, the appraisal will lean on the franchise and the lease, so both belong in the study.

No class-specific limitation applies. Limited-service restaurants are counted as coded on the SBA record, and the rates on this page are floors.