Restaurant Feasibility Study in the Knoxville, TN Metro Area

Top class, mid-sized loans

Knoxville puts sit-down restaurants first among 39 asset classes, and the area stands 117 of 821 nationally. A quotient of 0.90x puts the class slightly under its national share. The metro's 41 loans, approved from FY2017 to FY2026, total $23.7 million, and Knox County holds 26 of them.

Loan size

The $350,000 midpoint stands 1.27x above what restaurants borrow nationally, with typical loans ranging from $150,000 to $661,200. Franchise share is 14.6%, so independents carry most of the record. SBA does not print the 7(a) and 504 counts, so the study cannot tell whether real estate was financed in this record, and it should say how it is proposed.

What cannot be said

No cancellation rate is reported, the cohort being under 30 loans, and charge-offs are also withheld. Holder names are absent because none reaches the minimum loan count. A lender or borrower wanting these facts should look to the Tennessee pages and the national page for the class, and should note that the same gap means nothing can be inferred about performance in this one metro.

Years

Four years can be shown. FY2022 has 7 loans and $5.4 million, FY2024 has 6 and $2.4 million, FY2025 has 5 and $2.5 million, and FY2026 has 11 and $7.1 million. The latest year is the largest by count and by dollars among those printed, which may show a pickup in approvals, though a handful of loans can move a year.

Studying a Knoxville restaurant

A study should look at the metro's demand drivers, such as any campus calendar and downtown traffic, then test the competing restaurants in the same part of the city and what diners in the trade area spend. Labor, build-out cost against a loan near $350,000, and lease terms need a line each. Where the plan is a purchase, ask how much of today's sales rest on the present owner's personal following. A first year that starts slowly must still service the loan, and the appraisal should keep the operating business apart from any real estate. The program split is unknown, so the study should not assume real estate is financed.