Restaurant Feasibility Study in the Austin-Round Rock-San Marcos, TX Metro Area

A parity market with oversized tickets

Austin restaurants sit at the national norm in share and above it in size. The location quotient is 1.01x, practically parity, but the median loan of $475,500 is 1.73x the national median for full-service restaurants, a gap that points to larger buildings, more equipment or purchases of established rooms. SBA approved 266 loans from FY2017 to FY2026, worth $198.9 million, putting the area 26 of 821 nationally, while restaurants lead the local ranking at 1 of 39.

Where the loans go

Central-half tickets range from $150,000 up to $1.0 million. SBA 7(a) accounts for 238 loans and SBA 504 for 28, and franchised units make up 13.2%. Travis County leads with 160, Williamson County has 76 and Hays County 22. Volume peaked at 43 loans in FY2017, bottomed at 15 in FY2021 and recovered to 34 in FY2025 and 33 in FY2026. Capital Certified Development Corporation holds 17 of the 504 loans, with $22.5 million, a notably large amount for a single development company.

Lenders on the 7(a) side

No single bank dominates. The Huntington National Bank holds 24 loans worth $12.6 million, PNC Bank, National Association 20 for $6.4 million, Horizon Bank SSB 14 for $10.9 million, Frost Bank 13 for $10.5 million and JPMorgan Chase Bank, National Association 10 for $4.3 million. The spread is a sign of a market where borrowers have choices, though the page makes no claim about how any institution decides. SBA names today's holder, which may differ from the originator.

Cancellations and losses

Cancellations after approval are at least 8.5% across the FY2017 to FY2024 approval years, a figure that stays 8.5% even when undisbursed loans are tallied as cancelled. Charge-offs so far are at least 6.5% among the 107 loans approved in FY2017 through FY2021 that funded. A five-year charge-off rate is withheld, with no number given and no assumption of zero.

Testing an Austin restaurant

With tickets this far above the class norm, a study should justify the size: is the project a freestanding building, a large format, or a purchase? It has to test sales per seat against the occupancy costs of the actual submarket, show a coverage ratio with a slow ramp, and count the competing concepts near the site. The appraiser will want sales that a comparable room achieves. Austin's figures use the July 2023 area boundaries; a loan with an unplaceable county is simply not counted.