Restaurant Feasibility Study in Oklahoma

Oklahoma's largest SBA class

Full-service restaurants receive more SBA loans in Oklahoma than any other class, ranking 1 of 39 among Oklahoma asset classes. Over FY2017 to FY2026 Oklahoma approved 254 restaurant loans worth $110.4 million, placing the state 31 of 54 for the class, and a 0.93x location quotient shows the class close to its national share. The Oklahoma median was $270,250, or 0.98x the national full-service median, with the middle half between $125,000 and $600,000. On our two-sided test the Oklahoma median and both floors stay too near the Oklahoma all-asset book and full-service restaurants elsewhere to count as distinct, so the cell is defined by its volume and by one lender.

BancFirst and the Oklahoma lender list

BancFirst holds 53 Oklahoma restaurant loans worth $29.0 million, by far the largest book. Security Bank holds 15, Arvest Bank 13, First State Bank 10 and First Oklahoma Bank 8. SBA 504 takes 27 approvals against 227 under 7(a), led by Rural Enterprises of Oklahoma, Inc. with 12, Small Business Capital Corporation with 6 and Metro Area Development Corporation with 5. Franchise concepts account for 16.9% of Oklahoma loans. Volume has drifted down from 33 approvals in FY2017 and 34 worth $21.0 million in FY2022 to 19 in FY2026.

Oklahoma restaurant approvals close well: just 7.5% of those dated FY2017 to FY2024 were cancelled at the floor, 7.9% at the ceiling. The charge-off record is the interesting part. Of 125 Oklahoma restaurant loans funded over FY2017 to FY2021, 4.0% are written off by now, but only 0.80% failed inside five years, so most Oklahoma losses have arrived after year five. Each is a floor, since Oklahoma borrowers are still paying.

What an Oklahoma restaurant study must test

Tulsa County holds 77 approvals and Oklahoma County 66, then Cleveland at 17, Canadian at 16 and Wagoner at 7, so those two counties give most of the Oklahoma comparison data. A feasibility study must test the trade area's dining spending, the competing restaurants, and the concept's seat count, check average and turnover. Because Oklahoma losses tend to come late, the study should look at lease terms, remodel needs and how the concept holds up as new competition opens over the full loan term, not only at the first-year ramp. Cost must cover build-out and equipment at current bids. The payment test should hold at the actual loan, up to $600,000 at the upper quartile, and any Oklahoma real estate should be appraised apart from the business.