Restaurant Feasibility Study in the Cape Coral-Fort Myers, FL Metro Area

A one-county restaurant market

Every one of the 87 full-service restaurant loans in the Cape Coral-Fort Myers area sits in Lee County, so the cell is really a Lee County story. SBA approved these loans between FY2017 and FY2026, worth $69.2 million in gross dollars. Within Lee County's own mix the class stands first among 39, and the area is 59 of 821 for the asset class, with a location quotient of 1.12x. What distinguishes the cell from the class across the country is loan size: the median of $487,000 is 1.77x the national midpoint, with loans between the quartiles running $226,250 to $1.2 million.

Programs, brands and holders

Programs split the 87 loans into 76 on 7(a) and 11 on 504, and franchised concepts account for 16.1%, so independents carry most of the volume. The Huntington National Bank is credited with 16 7(a) loans worth $7.8 million, Newtek Bank, National Association with 9 worth $4.5 million and Fifth Third Bank with 6 worth $1.9 million. For 504, Florida Business Development Corporation holds 5 loans worth $2.2 million. This is SBA's list of holders, and a name on it is not a signal of what that institution will approve.

A seasonal Gulf Coast market

Annual counts are partly withheld for thin cohorts. FY2017 shows 15 loans and $10.5 million, FY2020 only 8 loans and $4.5 million, and FY2024 11 loans and $13.0 million, the largest dollar year printed; FY2018 and FY2019 are blank and not zero. A restaurant here lives on a seasonal population, with winter residents and visitors swelling demand and a slower summer, which the loan record cannot show but a study must.

Floors and the study

Cancellation reaches 10.9% or more of the FY2017 to FY2024 approved loans, which is a floor. Left out of the table for lack of loans are the upper limit of cancellations and the percentage charged off, and neither is zero. For a Cape Coral or Fort Myers restaurant the study should test the seat demand across seasons, parking and visibility on the corridor, flood and insurance exposure for the building, what a build-out or a purchase would cost beside loans near the median, and cash flow through the slow months. Fort Myers membership is by county: the one where a project sits must turn up on the 2023 metro map.