Restaurant Feasibility Study in Maine

Maine restaurants: small loans, strong weight

Maine finances its restaurants through SBA in small amounts. The typical Maine full-service restaurant loan was $178,000, only 0.65x the national figure for the class, and our screen flags that size as distinct: it sits beyond our margin from Maine's lending in every class and from sit-down restaurants nationwide, so it leads this page. Maine's middle half of restaurant approvals reaches from $75,000 to $412,000. Restaurants also carry unusual weight here. They rank 1 of 39 among Maine classes by loan count, and Maine's location quotient for restaurants, 1.43x, puts them well above their national share, even though Maine ranks 30 of 54 states, with 256 approvals worth $87.3 million from FY2017 to FY2026.

Maine restaurant owners make heavy use of SBA 504, with 66 approvals against 190 under SBA 7(a), which points to many buying their buildings. Granite State Economic Development Corporation holds 53 of those Maine 504 loans, worth $26.4 million, and Southern Maine Finance Agency holds 12. Local banks dominate 7(a): Bangor Savings Bank holds 57 loans worth $8.7 million, TD Bank, National Association 27, Maine Community Bank 20, Kennebunk Savings Bank 13 and KeyBank National Association 12. Franchising barely registers at 2.3%. Cumberland County has 90 approvals and York 85, far ahead of Penobscot with 17 and coastal Knox and Lincoln with 10 each. Lending was busiest early, with 41 loans in FY2018 and $18.1 million in FY2017.

Low cancellations, low losses

Maine's outcome record is mild. At least 6.4% of FY2017 to FY2024 Maine restaurant approvals were cancelled, and 6.9% at the ceiling when undisbursed loans are added. Of 126 Maine restaurants funded in FY2017 to FY2021, 1.6% are charged off to date and 0.79% failed before year five. These are floors, but they describe a market where few funded Maine restaurant loans have gone bad.

What a Maine restaurant study has to test

Seasonality is the first question in Maine. A study has to measure demand by month, separating year-round residents from summer visitors, because a restaurant in York or Lincoln County may earn much of its year in a short season, while one in Cumberland or Penobscot depends more on locals. Maine cost work covers the acquisition price or fit-out, kitchen gear and, where SBA 504 is used, the building itself. Debt service coverage has to be shown on the weakest months as well as the annual total, with labor and food costs at current Maine levels, and a Maine loan near $412,000 has to clear a higher bar than one at the $178,000 median. Where the restaurant owns its building, the appraisal should value the real estate for a buyer who might not run a restaurant.