Quick Service Restaurant Feasibility Study in Pennsylvania

Smaller tickets for Pennsylvania counter service

Pennsylvania's quick service borrowers take smaller loans than the class does elsewhere. The median is $206,750, which is 0.66x the national median, and that is where this cell parts from both Pennsylvania's broader SBA lending and quick service nationally. Loans of $50,000 or less make up the bottom quarter, and the top quarter starts at $475,000. The volume is large: 760 loans and $264.6 million across FY2017 to FY2026, placing the state 9 of 54, with the class holding 2 of 39 in Pennsylvania's own ranking. A location quotient of 1.09x puts the state slightly above the national share. Franchised units account for 39.6% of loans, so independents make up the larger group.

The small median shows in who holds the loans. SBA 7(a) carried 736 of them and SBA 504 just 24, and the biggest holders carry many small loans: The Huntington National Bank holds 107 for $24.7 million, Manufacturers and Traders Trust Company 59 for $8.3 million and TD Bank, National Association 55 for $3.8 million. Wilmington Savings Fund Society FSB holds 38 loans for $18.0 million and Northwest Bank 36 for $6.1 million. The few 504 loans are spread thinly: Regional Development Funding Corporation holds 5, as does South Eastern Economic Development Company of Pennsylvania.

A wide gap between cancellation floor and ceiling

Cancellation shows a 14.3% floor on FY2017 to FY2024 approvals against a 17.1% ceiling, a spread that shows a number of approved loans still waiting to fund. Charge-offs in the 295-loan FY2017 to FY2021 cohort stand at 7.8% to date and 4.1% within five years. Those floors are high enough that a Pennsylvania lender will want real equity and a seasoned operator behind a new concept. Volume rose from 50 loans and $16.2 million in FY2020 to 92 loans in FY2023 and 93 loans worth $44.9 million in FY2025.

Feasibility for a Pennsylvania counter-service concept

Allegheny with 102 loans and Philadelphia with 92 lead, followed by Montgomery with 68, Bucks with 62, and Delaware and Lancaster with 41 each, so the market splits between Pittsburgh, Philadelphia and its suburbs, and Lancaster. A study should build demand from the site's traffic, daytime population and the counter-service competitors a customer passes on the way; an independent concept also needs proof that its menu and price point already sell in that neighborhood. Cost has to cover build-out, kitchen equipment and opening payroll. Coverage needs a case with sales below the plan and labor above it. With little real estate in the loans, the appraiser will be valuing the business, so the study's cash flow is the collateral argument.