Restaurant Feasibility Study in Missouri

Missouri restaurants: early losses on ordinary loans

Missouri's full-service restaurant loans look ordinary until the loss record. The median is $267,800, almost the class's national median at 0.97x, with the middle half between $135,000 and $550,750. The state approved 495 loans for $236.5 million over FY2017 to FY2026, 20 of 54 among states, and the class tops Missouri's own list at 1 of 39; its location quotient is 0.94x. Our margin test does not flag the cell, yet its charge-off floor deserves the most attention of anything on this page.

Of 225 Missouri restaurant loans disbursed in FY2017 to FY2021, 8.9% have been charged off so far, and 7.1% within five years of approval, which means most of the failures came in the opening years. It tops both Missouri's all class floor and the national floor for full-service restaurants, and it can only rise as the remaining loans age. Cancellation is moderate by comparison, touching 10.3% of the FY2017 to FY2024 approvals and 11.1% once the undisbursed ones are counted.

Lenders and counties across Missouri

Volume has been flat, between 42 and 58 loans every year, with 42 for $22.8 million in FY2026. The mix is 444 under 7(a) and 51 under 504. Rural Missouri, Inc. leads the 504 lenders with 32 loans for $17.9 million, with St. Charles County Economic Development Council far behind at 6. Among 7(a) lenders OakStar Bank (28 loans, $20.9 million) and Midwest Regional Bank (28 loans, $18.0 million) share the top, then U.S. Bank, National Association (23), Simmons Bank (19) and The Bank of Missouri (19). Franchise borrowers are 10.1%. Greene and Jackson tie at 66 loans each, then Saint Louis County (56), Saint Louis City (48), Saint Charles (34), Boone (32) and Taney (26).

What a Missouri restaurant study has to test

When most losses arrive early, the opening year is the test. A study should project covers and average check month by month from the first day, not from a stabilized year, and set them against the restaurants already competing in the trade area, whether that is a metro neighborhood or a smaller county seat. Cost needs a full kitchen and build out budget, plus a working capital reserve sized to carry the restaurant through a slow start. Test debt service coverage on the opening years of operation. If a building is financed, the appraisal must give its value to another operator, since that is what protects the lender if the concept fails.

This class carries no limitation line; Missouri's restaurant loans are filed under the industry code each borrower supplied, and every rate is a floor.