Restaurant Feasibility Study in Nevada

Nevada restaurants borrow above the national median

Nevada restaurant owners borrow more than full-service operators elsewhere. The median loan is $350,000, or 1.27x the class norm nationally, and it is the median that separates Nevada's sit-down restaurant lending from both the state's other SBA lending and the class nationally. The middle half of Nevada's loans spans $137,000 to $777,700. The market is not large: 305 loans and $179.3 million from FY2017 to FY2026, which ranks Nevada 27 of 54 among states. Within Nevada, though, restaurants are the biggest class, 1 of 39, and a 0.90x location quotient leaves them slightly underweight against the nation.

Clark County dominates, with 236 loans, against 45 in Washoe, 7 in Carson City and 5 in Douglas, so Nevada restaurant lending is mostly Clark County lending. SBA 7(a) carried 272 loans and SBA 504 carried 33. Nevada State Development Corporation holds 19 of those 504 loans for $17.7 million and The Mortgage Capital Development Corporation 9 for $12.1 million. On the 7(a) side, U.S. Bank, National Association holds 43 loans for just $2.1 million, while America First Federal Credit Union's 16 loans reach $17.7 million and Zions Bancorporation, National Association's 17 reach $9.2 million. Newtek Bank, National Association holds 20 and Newtek Small Business Finance, LLC 10. Franchise concepts take 11.5% of loans.

A small cohort behind the loss floor

The charge-off floor rests on only 101 loans disbursed from FY2017 to FY2021: 5.0% charged off to date and 3.0% within five years. Cancellation is 10.9% of FY2017 to FY2024 approvals, or 11.4% when undisbursed loans count. With a cohort that small, a few failures move the rate, so a lender should treat these floors as a guide, not a benchmark. Lending has been growing, from 19 loans and $18.3 million in FY2021 to 38 loans and $26.1 million in FY2023 and 48 loans and $31.9 million in FY2026, and most of those newer loans have yet to show how they perform.

What a Nevada restaurant study must test

For a Clark County restaurant, demand has to be measured at the site: who the restaurant will draw and the dining competition within reach. Cost must cover the build-out and kitchen at current prices and a reserve for a slow opening. Because the median loan is larger than the national norm, the coverage test matters more: it should be run on realistic covers and check averages, and on a downside where traffic softens. If the building is financed, the appraisal must support its value as restaurant space in its own submarket, not on the strength of one operator's projections.