Quick Service Restaurant Feasibility Study in Wisconsin

Wisconsin quick service and its 504 loans

Wisconsin's limited-service restaurant lending is ordinary in size. The median loan is $304,000, 0.98x what the class borrows at the median across all states, and the state's location quotient of 0.91x leaves quick service slightly under its national weight in the Wisconsin SBA book, even though it is the 2 of 39 class there by count. Wisconsin places 18 of 54 among states, with 397 approvals and $187.3 million approved over FY2017 to FY2026. The program mix is 55 SBA 504 loans against 342 under SBA 7(a).

Who holds the loans

WBD, Inc. holds the most 504 loans, 42 worth $35.7 million, and Racine County Economic Development Corporation adds 12. The 7(a) holders are led by Bank Five Nine with 24 loans, The Huntington National Bank with 21, Bank First, N.A. with 20 worth $11.8 million, and Associated Bank National Association with 14. Wisconsin Women's Business Initiative Corporation also holds 20 loans, but for only $2.4 million. Franchises account for 52.9% of loans. Milwaukee County leads with 75 loans and Dane with 56. FY2021 brought the largest dollar total, $32.4 million on 48 loans, and FY2019 the most loans, 53.

Floors, and the study to prepare

Cancellation reached at least 13.9% of Wisconsin quick-service approvals from FY2017 to FY2024, and 14.5% on the ceiling with undrawn loans included, a narrow gap, meaning few approved loans were still waiting on funds. Of the 190 loans that funded in FY2017 to FY2021, 4.7% are charged off so far and 3.2% went bad within five years, and further Wisconsin failures could lift both. Where the real estate is in the deal, the study has to do double duty. It must show that the restaurant itself will produce sales and margins to cover debt service after royalties, through a Wisconsin winter as well as a summer, and it must give the appraiser enough income and land evidence to support the building's value on its own. Demand work should cover traffic counts, access and the competing drive-throughs and franchise units within the trade area, and the cost work should test the brand's prototype budget against local construction prices.

Limited-service restaurants carry no coding limitation. Both outcome rates are floors.