Restaurant Feasibility Study in the Indianapolis-Carmel-Greenwood, IN Metro Area

Below the national tilt, with a first-place class

Full-service restaurants top the Indianapolis-Carmel-Greenwood list of 39 classes, yet the location quotient is 0.79x, below the national share. The area ranks 29 of 821 for the class. SBA approved 241 loans for $122.1 million across FY2017 to FY2026. Marion County has 108 of the loans, Hamilton County 56, Hendricks County 23, Johnson County 14 and Hancock County 13.

The median of $225,000 is 0.82x the national figure, while the middle half of loans covers $50,000 up to $583,300. SBA 7(a) accounts for 215 loans and SBA 504 for 26. Franchise flags appear on 15.4% of loans, so independents are the large majority. A study of a restaurant that is buying its building should treat the 504 side as a real option.

Holders and their books

SBA names the lender now holding each loan. For 504, Premier Capital Corporation holds 14 loans worth $8.8 million and Indiana Statewide Certified Development Corporation 12 worth $17.3 million, the latter with far larger loans. For 7(a), The Huntington National Bank holds the most, 86 loans ($18.9 million), then KeyBank National Association 16 ($11.2 million), First Merchants Bank 9 ($3.5 million), First Financial Bank (OH) 8 ($3.1 million) and Celtic Bank Corporation 7 ($8.7 million). Celtic's loans are by far the largest on average. A list of this kind tells a borrower where loans are held, and it says nothing on how a holder responds to a new request.

For FY2017 to FY2024, cancellation took 9.0% or more of approvals; Loan Analytics withholds the ceiling for this cell. It also withholds the charge-off rate within five years, so neither value has a number here and neither is zero. The 120 loans disbursed from FY2017 to FY2021 show 5.0% or more charged off to date. Approvals fell from 41 in FY2017 to 17 in FY2019, and were 17 again in FY2026, worth $18.3 million, the largest dollar figure of any year.

What an Indianapolis restaurant study has to test

The first task is deciding which part of the area the project belongs to, Marion County with its 108 loans or one of the surrounding counties, since the loan counts differ widely between them. Demand is built from daytime and evening population, event traffic and the competing seats nearby. Cost should cover the kitchen, hood and grease-trap work the building needs. Debt service coverage needs a realistic opening ramp, and any real estate in the 504 case should be appraised apart from the business. These Indianapolis totals take in only loans whose county shows up on the July 2023 list, which leaves out any loan with an unplaced county.