Restaurant Feasibility Study in Hawaii

Hawaii's top class, built on very small loans

Full-service restaurants are Hawaii's largest SBA class, ranking 1 of 39 among Hawaii asset classes, and their 1.27x location quotient shows them weighing more in Hawaii lending than nationally. Yet the loans are tiny: the Hawaii median is $55,000, just 0.20x the full-service median for the nation, and approvals in the middle half run only from $47,500 to $274,750. Across states the cell is small: Hawaii's 116 approvals over FY2017 to FY2026 carry $38.8 million and rank 42 of 54. That tiny median is not flagged against Hawaii's all-class record, and Hawaii's outcome floors are not flagged either.

Central Pacific Bank's small-loan book

One holder accounts for much of the count. Central Pacific Bank holds 59 of Hawaii's restaurant loans, worth $6.3 million. First Hawaiian Bank's 10 loans total $738,000, Northeast Bank has 6 and Hawaii National Bank 5 worth $1.4 million. With 109 loans under 7(a), 7 under SBA 504 and a franchise share of 0.00%, these are independent Hawaii restaurants borrowing modest sums. Honolulu County holds 89 approvals, Kauai 11, and Hawaii and Maui Counties 8 each. Lending has been uneven, with 23 loans in FY2017, 4 in FY2021 and 23 again in FY2024.

Cancellations and charge-offs

At least 12.1% of Hawaii restaurant approvals over FY2017 to FY2024 were cancelled, and 15.2% when loans awaiting disbursement are counted. Of 51 Hawaii restaurant loans disbursed in FY2017 to FY2021, 5.9% have now been charged off, and 3.9% were lost within five years of approval, so most of the Hawaii loss came early. All rates are floors.

Any Hawaii full-service restaurant study has to test covers and average check at the specific location, and set food cost, labour and rent against realistic sales. For a small working capital loan near $55,000, the question is whether the restaurant's existing cash flow covers the new debt; for a larger build-out or purchase, the study has to show debt service coverage through a slow season and an appraisal or business valuation that supports the price.

No coding caveat attaches to full-service restaurants; each Hawaii count rests on the industry code the loan carries.