Restaurant Feasibility Study in Illinois

Cook County and a strong 504 presence

No class draws more Illinois SBA loans than full-service restaurants, 1 of 39, and Illinois is 6 of 54 among states for them, at a 1.16x location quotient. From FY2017 to FY2026, 1,317 Illinois restaurant loans were approved for $759.6 million. Cook County alone holds 689 of them, with DuPage at 94, Lake at 91 and Kane at 70, so this is largely a Chicago-area file.

No headline measure takes the Illinois cell past our distinctness margin against both Illinois and full-service restaurants nationally. The Illinois median loan is $304,000, 1.11x the national median, and the middle half runs from $100,000 to $703,900. What sets the page apart in practice is the program mix: SBA 504 carried 214 Illinois approvals against 1,103 under SBA 7(a), and the 504 book is concentrated. Small Business Growth Corporation holds 123 Illinois restaurant loans worth $97.9 million and SomerCor 504, Inc. 79 worth $55.5 million. Those are fixed-asset loans, which typically means real estate.

Lenders and the floors

On the 7(a) side, The Huntington National Bank holds 293 Illinois loans for $79.7 million, while Byline Bank holds 98 for $104.6 million, larger tickets in a smaller book. U.S. Bank, National Association holds 54 worth just $5.8 million. Franchise concepts make up 9.1% of loans. Illinois restaurant approvals of FY2017 to FY2024 lost 14.7% or more to cancellation, with a 17.2% ceiling; of the 473 Illinois loans disbursed FY2017 to FY2021, 8.0% or more went to charge-off and 5.9% before year five. Together those floors say Illinois restaurant deals are lost on both sides of the closing table.

Illinois volume rose from 80 approvals in FY2021, worth $47.2 million, to 201 in FY2025, worth $113.6 million.

What an Illinois restaurant study must test

A study here has to answer whether the concept can pay for the business and, where 504 is used, the building too. Demand needs a trade area read at the block level in Cook County and at the corridor level in the collar counties. Cost must separate real estate, kitchen equipment and build-out. Debt service coverage should be tested at sales the operator has achieved before, with an early-years stress given the five-year loss floor of 5.9%. The appraisal must support the building for an alternative user, because a lender in a first or second position on an Illinois 504 deal relies on it if the restaurant closes.