Restaurant Feasibility Study in Pennsylvania

No class in Pennsylvania's SBA lending has more approvals than full-service restaurants: 1 of 39, on 1,170 approvals worth $568.0 million from FY2017 to FY2026, and Pennsylvania ranks 9 of 54 among states for the class. Restaurants also take more of Pennsylvania's SBA loans than their national share, at a location quotient of 1.12x. The median loan is $225,000, 0.82x the national median, and the Pennsylvania restaurant cell shows no outlier on the median or the two outcome floors. The Pennsylvania figures also show how late the losses have arrived.

Losses that arrived late

Of the 496 loans disbursed in FY2017 to FY2021, 3.4% have been charged off to date, but only 1.4% within five years of approval, so Pennsylvania's restaurant losses mostly came after the fifth year. Lenders should therefore watch a Pennsylvania restaurant loan through its whole term rather than only its opening years. Cancellations in Pennsylvania restaurants come to at least 13.2%, and at most 14.5%.

Lenders across both ends of the state

The Huntington National Bank holds 173 of the 7(a) loans worth $37.0 million, TD Bank, National Association 83, Manufacturers and Traders Trust Company 72, Wilmington Savings Fund Society FSB 57 worth $53.7 million and KeyBank National Association 47. Among 504 holders, Empire State Certified Development Corporation counts 28, NEPA Alliance Business Finance Corporation 20, and 19 belong to South Eastern Economic Development Company of Pennsylvania. Because SBA names the holder now, Huntington's 173 may include loans it acquired. SBA 7(a) carries 1,076 loans and SBA 504 carries 94. Franchise units are 7.0% of loans, and half of all loans fall between $50,000 and $599,250.

What a Pennsylvania restaurant study must test

Allegheny County leads with 215 approvals and Philadelphia follows with 160, then Montgomery with 90, Bucks with 68, Chester with 48 and Lackawanna with 43. Pennsylvania studies should project covers and check size against the restaurants a diner passes on the way. Cost testing must price the kitchen, dining room and any building work from bids. Coverage should be stressed across the whole loan term, not just the opening years, given how late losses have come. A 504 building purchase needs an appraisal that tests both restaurant value and the value for re-leasing. Approvals fell from 165 in FY2017 to 71 in FY2020 and reached 114 and $78.5 million in FY2026. Pennsylvania restaurant figures carry no coding caveat.