Restaurant Feasibility Study in the Pittsburgh, PA Metro Area

Restaurants in Pittsburgh's SBA record

Pittsburgh's metro area carries 332 loans to sit-down restaurants across FY2017 to FY2026, worth $115.2 million. Restaurants rank 1 of 39 classes inside the area, and the area ranks 22 of 821 nationally for the class. The location quotient is 1.44x, a strong over-representation: Pittsburgh gives restaurants a bigger share of its SBA loans than the country does. Allegheny County alone has 215 loans, then Westmoreland with 40, Beaver and Butler with 21 each, Washington with 16, and Fayette, Armstrong and Lawrence with 7, 6 and 6.

Size is what stands apart. A $148,500 median is only 0.54x the class median nationally, and quartiles fall at $50,000 and $462,000. Pittsburgh restaurant borrowers ask for much less than the class does nationally, and this page offers no explanation of why. A study for a bigger request must justify why this project sits above the local norm.

Programs and lenders

Pittsburgh counts 303 7(a) loans against 29 504 loans, and a franchise share of 6.6%. The Huntington National Bank dominates the 7(a) table with 148 loans worth $30.0 million. KeyBank National Association has 26 worth $14.5 million, Northwest Bank (PA) 21 worth $7.9 million, PNC Bank, National Association 18 worth $5.3 million and First Commonwealth Bank 16 worth $10.9 million. The 504 holders are Regional Development Funding Corporation with 16 loans at $10.6 million and, last, Empire State Certified Development Corporation: 13 loans, $10.8 million.

Each count reflects loans an institution holds or held, and a single bank holding 148 loans tells us about its book, and it tells a borrower nothing about the standards that bank applies today.

Outcome floors and the work of the study

Pittsburgh shows a cancellation floor of 13.3% on approvals through FY2024, with a ceiling of 15.1% if undisbursed loans are treated as cancelled. Among 136 disbursed FY2017 to FY2021 loans, charge-off to date is at least 4.4%; the five-year rate is withheld here, and withheld does not mean zero. The cancellation floor shows that deals fall through often.

A feasibility study should test local demand by neighborhood, rent against projected sales, the seasonal swing, and coverage at a loan close to the $148,500 median. Allegheny and Westmoreland restaurant loans are placed by the county named on the loan, checked against the July 2023 delineation, while any loan failing that check sits in no metro at all, leaving 332 as a lower bound on Pittsburgh lending.