Restaurant Feasibility Study in Delaware

Delaware's top class is a small book

Full-service restaurants are Delaware's leading SBA class, 1 of 39 within the state, yet Delaware sits 49 of 54 among states for the class because its total is small: 85 approvals worth $34.8 million in FY2017 to FY2026. At 0.89x, Delaware's location quotient shows the class a little under its national weight, and the median Delaware restaurant loan of $150,000 is 0.55x the national median. No measure here crosses our distinctness line.

Leasehold loans through a few banks

SBA 7(a) carries 83 of the approvals and SBA 504 only 2, and the middle half runs $50,000 to $583,500, from equipment and working capital up to restaurant purchases. Franchises are 5.9% of loans. Among holders, Manufacturers and Traders Trust Company leads on 29 loans for $4.5 million, Wilmington Savings Fund Society FSB 14 for $10.5 million, TD Bank, National Association 10 for $487,000 and True Access Capital Corporation 6 for $1.2 million. New Castle County has 44 approvals, Sussex 27 and Kent 14. Lending nearly stopped in FY2021 and FY2022, with 2 approvals each, then returned to 13 worth $10.6 million in FY2025.

Outcomes on a small base

Delaware restaurants funded during FY2017 to FY2021 number 34, close to the size at which we stop publishing rates, with a charge-off floor of 5.9% and 2.9% within five years. No Delaware approval from FY2017 to FY2024 still awaits its money, so cancellation has a single value, 10.6%, as both floor and ceiling. With so few loans, a single failure moves either rate visibly, which is reason to read these Delaware figures as indications rather than benchmarks.

Because the Delaware sample is small, a restaurant study there has to rely on site evidence more than on state averages. Demand should be read from seating, menu price and the rival dining rooms chasing the same Delaware customers, including any seasonal swing in New Castle, Kent or Sussex. Cost needs kitchen equipment, hood and fire suppression, and dining room build-out priced from bids. Coverage should be modelled from covers and average check by month, with food and labour costs at realistic shares, and stressed for a slow season. For a purchase, the appraisal values the business and any real estate separately, and the study should show sales that the seller's records can confirm.

Delaware's figures include only SBA-guaranteed restaurant loans, coded by the borrower's industry, and the lenders shown are present holders; all rates are floors.