Restaurant Feasibility Study in the Cleveland, OH Metro Area

Many loans, very small ones

The Cleveland area's restaurant loans are small. The median of $71,100 is 0.26x the national median for full-service restaurant loans, and central loans range from $50,000 to $281,200. From FY2017 to FY2026 SBA approved 372 loans here for $93.0 million. Cleveland places 17th among 821 areas for this class, and locally full-service restaurants hold first place. The location quotient is 0.95x, close to the national share.

By program, 360 loans are SBA 7(a) against 12 under SBA 504; 8.9% of loans carry franchise flags. Cuyahoga County supplies 230 of the loans, followed by Lake County with 43, Lorain County with 38, Medina County with 29, and Ashtabula and Geauga with 16 each.

Who holds these files

SBA's lender table lists the holder now responsible for each loan. Cleveland's 7(a) list is dominated by The Huntington National Bank: 235 loans, $35.8 million. KeyBank National Association has 27 ($11.7 million), Fifth Third Bank 13 ($4.6 million), Growth Capital Corp. 9 ($995,000) and U.S. Bank, National Association 6 ($2.5 million). Those holdings describe where small restaurant loans reside; they are not a guide to what a holder demands from a new borrower.

Cancellation took no less than 11.8% of approvals from FY2017 to FY2024, rising to 13.9% once undisbursed loans are included. The 183 loans disbursed over FY2017 to FY2021 show that 3.8% at least have been written off by now. For losses booked inside the first five years, Loan Analytics withholds the rate because too few loans support one; that value stays blank here and is not zero. Annual approvals peaked at 65 in FY2018 and fell to 14 in FY2026, worth $6.1 million.

What a Cleveland restaurant study must test

Where loans are small, the study should be matched to the real cost of the project, but it still has to answer the hard questions. Is the trade area, whether downtown, the near west side or a suburb such as Medina, big enough to sustain the covers projected? How many comparable seats compete within a short drive? Is the owner buying a going concern, and if so what do the books support? Debt service should be tested against swings in monthly sales. The appraisal will carry little real estate value for a leased space, so equipment and leasehold terms matter. The counts here include only loans whose project county was placed in the July 2023 delineation, so they are minimums.