Restaurant Feasibility Study in the Cincinnati, OH-KY-IN Metro Area

A mid-sized loan in a three-state area

The Cincinnati area crosses Ohio, Kentucky and Indiana, and its restaurant loans have a distinctive size. The median of $180,000 is 0.65x the class's figure for the whole country, with the middle of the distribution spanning $50,000 up to $500,000, a wide spread that lets very small and quite large loans share a cell. The record holds 276 approvals and $104.4 million gross for FY2017 to FY2026. Cincinnati is 25th of 821 areas for the class, while restaurants lead the 39 classes locally. At 0.96x, the location quotient is essentially the national share.

SBA 7(a) accounts for 256 loans and SBA 504 for 20. Franchise flags appear on 19.6% of loans, a minority of the loans. Hamilton County supplies 146 loans, Butler County 34, Warren County 30, Kenton County in Kentucky 19, Clermont County 18, Boone County in Kentucky 10 and Campbell County in Kentucky 7.

The holders

The lender list is SBA's record of who now holds each loan. Huntington leads by a wide margin: 146 of the 7(a) loans, worth $44.1 million. After it come U.S. Bank, National Association with 17 ($2.4 million), Fifth Third Bank with 15 ($9.5 million), Peoples Bank (OH) with 8 ($2.4 million) and First Financial Bank (OH) with 7 ($2.7 million). No 504 lender reaches the listing floor. A reader should take these as holdings only: nothing here says what a holder requires of a new borrower.

Between FY2017 and FY2024, no fewer than 10.5% of approvals were cancelled, and 12.6% at the ceiling that adds loans never disbursed. Within the Cincinnati cohort of 137 disbursed loans, FY2017 to FY2021, no fewer than 6.6% have since been charged off. The within-five-years loss rate is not printed, since Loan Analytics withholds it for lack of enough loans, and it must not be read as nil. Approvals fell from 42 in FY2017 to 20 in FY2021 and were 20 again in FY2026, worth $10.8 million.

What a Cincinnati restaurant study has to test

Because loan sizes spread so widely, the study should start with which kind of project is being financed: a neighborhood room with a modest fit-out, or a larger concept with a bar, patio and kitchen. Demand must be tested within the proper trade area, across the river if the site is in northern Kentucky, with attention to the competing seats and how sales divide among lunch, dinner and events. Debt service coverage should assume a ramp and a food-cost margin the operator has achieved before. The appraisal for leased space rests on equipment and lease terms. Cincinnati's totals come from matching county names to the July 2023 area list; unmatched loans vanish from every metro, so each total errs low.