Restaurant Feasibility Study and SBA Loan Data

Questions buyers ask

Who prepares a feasibility study for a full-service restaurant loan?

An independent consultant with no stake in whether the restaurant opens. Loan Analytics prepares the study for the lender's credit file, whether that lender uses SBA 7(a) or 504, holds a USDA Business and Industry guarantee or lends conventionally, and Daniel Smith, MAI signs it. The study weighs the subject against this page's record and the rows for its state, metro and lender, then tests covers, check average, cost and coverage before a signed conclusion.

Does the SBA require a feasibility study for a restaurant loan?

Not in every case. Under the SOP passage that this site's 2026 fee survey reproduces, SBA may call for one when it needs a closer look at the type of restaurant and the market where it would open, and market saturation by industry type and location heads its list of circumstances. For a restaurant that is the natural question, since the class is lent to at volume, 3,574 7(a) approvals in FY2025. Lenders may also order one under their own policies.

How much does a restaurant feasibility study cost?

Restaurants are named in the opening tier of 'SBA Feasibility Study Cost in 2026', which is this site's 2026 fee survey of published provider prices: single-site SBA studies of standard special-purpose assets, at a published $5,000 to $12,500. Several sites, a concept without precedent or phased construction lift a study into a complex tier priced at $10,000 to $25,000, and studies built to 7 CFR Part 5001 for USDA cost $7,500 to $18,750 or more; SBA itself sets no fee. Our own fee comes back with the scope reply.

How long does a restaurant feasibility study take?

That turns on the scope, and we fix the schedule at the same time as the scope. Per the same survey, what stretches a study is more sites, new construction with a budget review and a ramp from completion, a franchise brand to be tested against its system's results, a USDA overlay, and rural markets so thin that competitors must be visited in person. Buying a restaurant with years of trading statements takes a shorter study than building one with no history. Name your lender's date when you request scope, and the timeline is set against it.

What will my lender check in a full-service restaurant feasibility study?

Demand it can believe, cost it can verify and coverage that survives a slow year: covers by daypart and the average check against dining rooms of the same concept and price; the build-out of kitchen, hood, bar and dining room plus opening expense and working capital to break-even; debt service tested at sales under the forecast, with current food and labor costs. The record explains the weight: a 6.7% charge-off floor on FY2017 to FY2021 7(a) restaurant loans, and no fewer than 12.5% of FY2017 to FY2024 7(a) approvals never funded.

What size SBA loan does a sit-down restaurant usually get?

Under 7(a) the median full-service restaurant loan is $246,000, with quartiles of $74,000 and $575,000; under 504 the median is $606,000, with quartiles of $346,500 and $1.1 million. Place moves those numbers far: state medians run from $55,000 in Hawaii to $459,000 in Georgia, and metro medians from $50,000 in Toledo and other Ohio metros to $700,000 in Myrtle Beach-Conway-North Myrtle Beach.

Should a restaurant project use SBA 7(a) or 504?

Restaurant borrowers have chosen 7(a) far more often: 28,716 loans against 3,515 under 504 in FY2017 to FY2026. 504 loans run larger, a $606,000 median against $246,000, and their charge-off floor is far lower, 0.94% against 6.7%, though they are cancelled slightly more often, 13.2% against 12.5%. This page describes 504 restaurant loans as property-backed, so the choice turns on what the project buys and what the lender offers. Either way the study is written to the program, and for 504 the real estate gets its own valuation section.

How often do SBA restaurant loans end in a charge-off?

For 7(a) restaurant loans funded between FY2017 and FY2021, the floor is 3.9% within 5 years and 6.7% to date; for 504 it is 0.44% and 0.94%. Each is a minimum, since loans still repaying can yet be charged off. Across states the printed floors span 0.00% in New Mexico to 11.7% in Vermont, and across metros 0.00% in Colorado Springs to 15.5% in Akron.

Which states have the most SBA restaurant lending?

California, with 4,184 loans and $2.50 billion in FY2017 to FY2026. New York is second by count at 2,192 loans, Texas second by dollars at $1.52 billion, and Florida third by dollars with $1.43 billion. Outside the states, the District of Columbia has 115 loans for $76.6 million and Puerto Rico 302 for $58.5 million. The thinnest state records are Wyoming's 37 loans for $20.1 million and Alaska's 54, too few in Wyoming's case to print either floor.

Which banks make the most SBA restaurant loans?

The Huntington National Bank, with 3,167 loans for $850.1 million in FY2017 to FY2026. Next by count are Newtek Bank, National Association with 960, Manufacturers and Traders Trust Company with 893, TD Bank, National Association with 867 and U.S. Bank, National Association with 839. By dollars, Bank of Hope ranks third with $314.3 million on 647 loans, after the two leaders by count. Development corporations rank high too, among them Granite State Economic Development Corporation (192 loans) and Empire State Certified Development Corporation (172). Lenders under 5 restaurant loans are left off the table.

Why are restaurant loans in Ohio so much smaller than in Georgia?

The tables show the gap without explaining it. Ohio's median is $85,000 and Georgia's $459,000; Ohio's 1,602 loans total $429.1 million, Georgia's 1,169 total $829.0 million. A small median can reflect leased dining rooms, equipment and working capital loans or purchases of existing restaurants; a large one can reflect land, a building and a ground-up kitchen. The study establishes which format the subject's trade area actually finances before using either state's figures. Loss floors are close: 6.1% in Ohio, 5.7% in Georgia.

Has SBA restaurant lending recovered since the pandemic?

In dollars, fully; in count, not to its old peak. 7(a) approvals fell to 1,932 in FY2021, the fewest since FY2000, then rose to 3,574 loans and $1.78 billion in FY2025, a dollar total no earlier year reached. The count remains below FY2007's 5,033, and FY2026 eased to 2,797. The newest loans carry no measured loss rate yet, because the charge-off cohort ends with loans funded in FY2021, so a lender approving into this market wants the study to show the trade area can absorb another dining room.

Is the study different if I am buying an existing restaurant?

Yes, because the evidence is different. For a purchase, the seller's documented sales, covers and costs are the starting evidence, tested against today's trade area. This site's 2026 fee survey reports that SBA's SOP calls for a valuation of the business, done independently, on a change of ownership where financing above the appraised real estate and equipment tops $250,000, or on a sale between related parties, at published prices of $1,800 to $7,000; SOP 50 10 8.1 also brings in a quality of earnings report for purchase prices of $3 million or more, at $10,000 to $30,000. Neither replaces the feasibility study.

Does a franchised restaurant need a different study?

This class counts sit-down restaurants by industry code whether independent or franchised, so the tables give no separate franchise figures. Loan Analytics' 2026 fee survey notes that a franchise adds a comparison of the brand's results across its system with the site's projection, and that the brand must appear on SBA's reinstated Franchise Directory before the loan proceeds. Our study then tests franchise fees in the budget, the protected territory against competing units nearby, and projected covers against the brand's comparable dining rooms.

Can the same study serve a USDA B&I or conventional restaurant lender?

Yes. Loan Analytics writes restaurant studies for SBA, USDA Business and Industry and conventional lenders alike. The same 2026 fee survey gives USDA studies their own band, $7,500 to $18,750 or more, because they follow the components and factors of 7 CFR Part 5001, and notes USDA's requirement of a study when a B&I loan over $1 million goes to a new business. The tables here hold SBA approvals only, so for other lenders they serve as context and the local evidence comes from fieldwork.

What does 'withheld' or 'not reported' mean in a restaurant row?

'Not reported' marks a rate whose cohort has fewer than 30 loans: Wyoming prints neither floor, and Newtek Bank, National Association none despite 960 loans. 'Withheld' is a value this page leaves unprinted, such as the floors of Phoenix-Mesa-Chandler and Readycap Lending, LLC, or the dollars of 504 loans at $150,000 or less. Neither is zero, and a study should never put a number on either. A printed 0.00%, as for New Mexico or Colorado Springs, is a measured floor and still a minimum.

Do bars and fast-food restaurants count in these restaurant figures?

No. Restaurants enter this class through the borrower's industry code for full-service dining, so table-service dining rooms are in, independent or chain, and quick-service units, caterers and bars without full food service are counted on other pages. A concept that straddles the line, such as a brewpub with a full kitchen, should be checked against the code SBA recorded, and its comparable set built from the concept rather than the label.