Restaurant Feasibility Study in Arizona

Full-service restaurants top Arizona's SBA lending by loan count, 1 of 39 classes, even though among states Arizona sits just 19 of 54 for the class. The state approved 506 loans worth $339.2 million from FY2017 to FY2026. Its location quotient of 0.77x is still under the national share: restaurants lead Arizona's list without dominating it. Arizona's distinctive figure is the median loan of $404,000, which is 1.47x the national median for full-service restaurants and separates the cell from both its state and the class.

Real estate in the Arizona restaurant book

SBA 504 carries 77 of the loans and SBA 7(a) 429, with The Mortgage Capital Development Corporation holding 37 of the 504 loans, worth $37.0 million, then Arizona Capital Source with 21 and CDC Small Business Finance Corp. with 18. Those building and land loans help explain the higher median, and an Arizona interquartile range of $150,000 to $870,000. On the 7(a) side, JPMorgan Chase Bank, National Association and Newtek Bank, National Association hold 28 loans each, Northeast Bank 23 and Wells Fargo Bank National Association 21. All of these are present holders in SBA's Arizona records. Franchise units account for 12.6% of loans, so most borrowers are independent restaurateurs.

Outcomes and the recent climb

The charge-off floor is 4.6% across 194 loans disbursed in FY2017 to FY2021, with 2.6% charged off within five years of approval. Arizona's cancellation measure spans 11.3% to 13.3%, floor to ceiling, a spread that reflects loans still waiting to fund. Approvals fell to 22 in FY2020 and climbed to 67 and $44.8 million in FY2024, then 72 in each of FY2025 and FY2026.

What an Arizona restaurant study must test

Maricopa County dominates with 335 approvals, far ahead of Pima with 46, Yavapai with 36 and Mohave with 24, so most studies will be testing a Phoenix-area site against a crowded field. Demand has to be measured in covers by daypart and season, with the trade area's dining competition mapped. Cost testing must price the kitchen, the dining room build and any building purchase. Coverage of the Arizona loan should be modelled on a realistic average check and table turns, stressed for the slow months. When 504 pays for the building, the appraiser has to support its value both as a restaurant and as plain retail space. Full-service restaurants carry no coding caveat, and the two outcome rates are floors.