Quick Service Restaurant Feasibility Study in the Detroit-Warren-Dearborn, MI Metro Area

388 limited-service restaurant loans in Detroit

SBA's loan files list 388 approved limited-service restaurant loans in Detroit-Warren-Dearborn from FY2017 to FY2026, $172.1 million in gross dollars. The median loan comes to $270,500, with the middle half running $66,900 up to $477,525. At 0.87x of the national median for limited-service restaurant, Detroit sits below the national figure.

Detroit against the nation at 1.05x

7(a) is the larger program here: 366 loans in 7(a), 22 in 504. The 366 7(a) loans around Detroit have room for working capital; the 22 504 loans stay with fixed assets. 59.0% of Detroit, MI loans went to franchised units. Among metro and micro areas, Detroit-Warren-Dearborn is 11 of 779 for limited-service restaurant; inside Detroit, the class itself is 2 of 39. 1.05x is the Detroit quotient: the class is larger in Detroit than across the country, which may mean demand or saturation. By county, Oakland County, MI leads with 159 loans, then Wayne County, MI with 139 and Macomb County, MI with 61.

Who holds the 388 Detroit, MI loans

Detroit-Warren-Dearborn approvals were highest in FY2018 (49 loans, $14.3 million) and lowest in FY2020 (25 loans, $8.7 million). Detroit 7(a) holders, ranked by loans: 143 loans and $26.7 million at The Huntington National Bank; 35 loans and $17.0 million at Oxford Bank; 20 loans and $8.9 million at Fifth Third Bank. SBA's file ties 143 Detroit-Warren-Dearborn loans to The Huntington National Bank as the current holder; it says nothing of how The Huntington National Bank underwrites. Under 504 for limited-service restaurant, the file shows Michigan Certified Development Corporation with 14 loans for $13.4 million. 16.1% is the least share of Detroit approvals cancelled, and 18.4% is the most once undisbursed loans are included. The Detroit cohort of 160 FY2017 to FY2021 loans has charge-offs of at least 4.4%, and the five-year rate is withheld.

Testing a limited-service restaurant project in Detroit

Before debt is sized in Detroit, MI, the study weighs the daypart mix, how many chains compete on the same corridors and commuter flow past the site, since those set Detroit revenue. Cost comes next: a Detroit budget must carry the pad or buildout, franchise-related outlays and the equipment package, each priced against Detroit quotes. Coverage in Detroit-Warren-Dearborn is tested at $270,500, $66,900 and $477,525 alike, because the record spans that range. The appraiser tests Detroit, MI collateral too, namely the lease terms, franchise-dependent business value and the pad or building; a Detroit study anticipates each. The $172.1 million Detroit record is a benchmark, not a forecast, and promises no Detroit borrower approval.

What the Detroit figures cannot say about limited-service restaurant

The 388 Detroit loans are assigned by project county, loan by loan. County names, Oakland County, MI among them, are paired to Detroit using the July 2023 delineation. The Detroit, MI cancellation floor and the Detroit charge-off floor rest on different cohorts here in Detroit, stated next to each rate.