Quick Service Restaurant Feasibility Study in Washington

Washington quick service deals usually close

What separates Washington's quick service book from Washington's other SBA loans, and from the class nationally, is how rarely approvals fall through. Only 7.3% of FY2017 to FY2024 approvals were later cancelled; treat undisbursed loans as cancelled too and the figure is still just 8.3%, below both comparators. The rest of the cell is close to type. Washington ranks 10 of 54 among states, with 681 loans and $287.7 million between FY2017 and FY2026, and the class is 2 of 39 within Washington. The location quotient of 1.19x means counter-service carries extra weight in Washington's SBA lending against the national mix, and the median loan of $275,700 is 0.89x the national median.

Independent operators outnumber brands here: franchise units make up 23.8% of loans. The loans cluster tightly, with half between $150,000 and $499,000. SBA 7(a) accounts for 661 loans and SBA 504 for only 20, with Northwest Business Development Association writing 10 of those for $4.4 million. Hanmi Bank leads the 7(a) list with 66 loans and $21.9 million, followed by Columbia Bank with 40 and $10.9 million, KeyBank National Association with 36 and $25.7 million, GBC International Bank with 33 and $12.8 million and Banner Bank with 32 and $9.6 million. That mix of lenders, with no one bank dominant, gives a Washington borrower several places to take a deal.

Losses after funding are moderate

The FY2017 to FY2021 cohort of 291 funded loans carries a 4.8% charge-off floor to date and 3.1% within five years. A low cancellation floor plus moderate losses means Washington lenders tend to decide early and then fund what they approve. For a borrower, the practical effect is that the hard questions come before the commitment letter, not after it, so the plan has to be complete when it reaches the bank. Volume has been rising, from 57 loans and $15.1 million in FY2019 to 89 loans and $43.9 million in FY2025 and 73 loans and $34.4 million in FY2026.

Making the case for a Washington unit

King County dominates with 262 loans, ahead of Pierce and Snohomish with 89 each, Clark with 35 and Spokane with 33, so most of this lending is in the Puget Sound region, where a new counter-service unit competes for lunch traffic with many others. A feasibility study should measure the site's daytime population, traffic and access, the competing restaurants on the same lunch run, and, for an independent concept, evidence that its menu and price point already draw customers nearby. Cost must include the build-out, hood and kitchen equipment and opening labor. Washington's wage levels belong in the coverage test from the first month, with a case for sales below plan. Since property is rarely part of these loans, business value is what the appraiser will weigh, and the study's cash flow has to carry it.