Restaurant Feasibility Study in North Carolina

North Carolina restaurant borrowers take large loans. The median full-service restaurant loan in the state is $432,000, or 1.57x the class median nationwide; half of North Carolina's loans sit in a middle band from $150,000 to $900,000. On that median, and only there, this cell departs from both North Carolina's overall SBA record and the class across the country. Over FY2017 to FY2026 the state approved 687 restaurant loans for $479.3 million, 15 of 54 among states. Restaurants lead every other class in North Carolina at 1 of 39, and the location quotient of 0.99x matches the national weight almost exactly.

A crowded lender field

No single lender owns this market. First National Bank of Pennsylvania has 39 loans for $26.8 million, The Huntington National Bank 38 for $23.9 million, TowneBank 33 for $34.8 million, and First Bank and Truist Bank 28 each. Business Expansion Funding Corporation leads the 504 lenders with 33 loans for $27.4 million; the program accounts for 48 loans against 639 under 7(a). Franchise borrowers are 18.0%. Wake (127 loans) and Mecklenburg (107) lead, but coastal and mountain counties carry real weight too: Buncombe (50), New Hanover (42), Brunswick (23) and Dare (19).

Losses spread over time

Of 269 North Carolina restaurant loans disbursed in FY2017 to FY2021, 7.1% have been charged off to date, with 3.7% falling inside five years of approval and the rest after. That floor sits above North Carolina's floor across all classes and close to the class nationally. Cancellation after approval was 10.7% for FY2017 to FY2024 approvals, or 11.6% once undisbursed loans are counted. FY2021 brought only 38 loans but $43.1 million, and FY2025 brought 92 for $69.6 million, the high point of the series.

What a North Carolina restaurant study needs

A loan near $432,000 can include the restaurant's real estate, so the study has to justify both the concept and the real estate. In a coastal county such as Dare or Brunswick, demand should be modeled season by season to capture any visitor peak; in Wake or Mecklenburg, the competition is dense and the study should map it street by street. Cost has to break out land or building, kitchen, dining room and opening reserve. Debt service coverage needs a slow season or a slow first year built in, since losses here have come both early and late. The appraisal must value the building for a different operator.

No limitation line applies to full-service restaurants; each loan sits under the industry its North Carolina borrower named, and the rates are floors.