Restaurant Feasibility Study in Alabama

Alabama's leading SBA class

Full-service restaurants are the top SBA class in Alabama, 1 of 39 by loan count, and at a location quotient of 1.10x they sit slightly above national weight. The state approved 253 loans worth $147.0 million over FY2017 to FY2026 but ranks only 32 of 54 among states. The median loan of $331,000 is 1.20x the national midpoint. Our screen does not find a distinct figure against Alabama's SBA record and full-service restaurants nationally, so what marks this cell is the class's leading place in the state's lending.

Lenders and counties across Alabama

Alabama's central half of loans spans $130,000 to $750,000. Of the loans, 222 used 7(a) and 31 used 504, and franchised restaurants take 20.9%. Newtek Bank, National Association holds 23 Alabama loans worth $10.2 million and PNC Bank, National Association 22 worth $10.1 million, and The Huntington National Bank holds 17, Northeast Bank 11 and ServisFirst Bank 7. Among certified development companies, Southern Development Council holds 10, and Florida Business Development Corporation and Birmingham Citywide Local Development Company hold 8 each. Jefferson County has 60 loans, Madison 29, Baldwin 24, Mobile 18 and Lee 16. FY2025 was the busiest year, with 46 loans and $23.1 million.

Losses that need weighing

Charge-offs stand at 10.8% of the 93 Alabama restaurant loans disbursed over FY2017 to FY2021, with 6.5% inside five years, so losses continued after the early years. Both are floors. Cancellations take 12.5% of Alabama's FY2017 to FY2024 restaurant approvals, 14.1% at the ceiling. For a lender, a full-service restaurant in Alabama is a credit where both early and later failures occur, which argues for strong equity and a reserve. An Alabama borrower should expect the lender to scrutinise the concept, the location and the operator's history before sizing the loan.

An Alabama restaurant study needs to test demand at the site: daytime and evening population, traffic, visibility and rival restaurants chasing the same Jefferson, Madison or Baldwin diners. Alabama cost lines include the build-out or purchase price, kitchen equipment and pre-opening spending. Payment coverage has to rest on realistic covers and average checks, with food and labour costs at local levels, and tested at lower sales. When the Alabama deal includes real estate, the appraiser will ask what another restaurant or retailer would pay for the building, and the study should arrive at a consistent value. Full-service restaurants carry no coding caveat.