Restaurant Feasibility Study in Ohio

Ohio restaurants: 1,602 loans at an $85,000 median

No class in Ohio's SBA lending has more loans than full-service restaurants, which rank 1 of 39 in the state, and Ohio ranks 5 of 54 among states for the class. SBA approved 1,602 such loans here from FY2017 to FY2026 for $429.1 million. The median, however, is just $85,000, which is 0.31x the national median for sit-down restaurants, and half of all loans fall from $50,000 to $334,750. That small ticket is the plain size picture for Ohio restaurants. The location quotient of 0.96x shows restaurants close to their national weight in Ohio's SBA book.

The Huntington National Bank holds 993 of these loans for $179.6 million. KeyBank National Association holds 66 loans for $26.4 million, Fifth Third Bank 32 for $17.4 million, U.S. Bank, National Association 36 for $5.8 million and Peoples Bank 32 for $7.2 million. SBA 7(a) accounts for 1,532 loans and SBA 504 for 70. Among the 504 lenders, Alloy Development Co., Inc. holds 16 for $11.4 million, Community Capital Development Corporation 18 for $5.9 million, and Ohio Statewide Development Corporation and Growth Capital Corp. 12 apiece. Franchises carry 13.6% of loans.

What 773 funded loans tell a lender

The charge-off record here rests on a large cohort: 773 loans disbursed from FY2017 to FY2021, of which 6.1% have been charged off so far and 3.4% within five years of approval. Cancelled approvals for the FY2017 to FY2024 group come to 11.5% at the floor and 13.5% at the ceiling. Volume has been shrinking, from 236 loans and $61.9 million in FY2018 to 117 loans in FY2025 and 88 loans worth $39.1 million in FY2026, so the recent loans are fewer but larger.

The Ohio restaurant study

Franklin County with 241 loans and Cuyahoga with 230 lead, followed by Hamilton with 146, Summit with 100 and Lucas with 75. Even for a small loan, the study must show that the concept fits its trade area: the households and workers within reach, competing restaurants of the same type and price, and the nights and seasons that carry the sales. Cost should include the kitchen and equipment, any remodel and the cash needed to reach break-even. Coverage needs the operator's real food and labor percentages, not industry averages. If the deal finances a building, the appraiser needs restaurant property sales to stand on.