Restaurant Feasibility Study in the Prescott Valley-Prescott, AZ Metro Area

Full-service dining as the leading class in Yavapai County

Prescott Valley-Prescott, AZ ranks full-service restaurants first, 1 of 39, in its own class order, and the 1.46x location quotient shows these restaurants carry more weight in Prescott's loans than in the nation's. Set against the whole country the area is more ordinary, 133 of 821. A $458,000 median loan reaches 1.67x the nationwide median for full-service dining, so these restaurants borrow on a bigger scale than peers elsewhere. Over FY2017 to FY2026, 36 approvals total $27.4 million.

Spread of loan sizes and program use

The middle half of loans stretches from $178,750 to $1.3 million, which is broad enough to hold a lease-hold fit-out and a purchased building in the same group. The program tally is 31 under 7(a) and 5 under 504. Yavapai County carries all 36, so the figures describe one county's restaurants.

Years that can be shown

FY2017 produced 7 loans and $2.5 million, and FY2021 produced 5 loans and $4.2 million. Every other year is withheld because counts are small, and the franchise share, cancellation rate and charge-off rate are hidden for the same reason. Loan Analytics applies that practice itself; none of the hidden items should be read as zero. No lender is named for this area.

Questions for a Prescott Valley-Prescott study

The first question is whether the dining room fills at the check average the concept assumes, which means counting covers by daypart and testing how seasonal the site is without leaning on any assertion about visitors. A study should lay out food and labor cost percentages, the kitchen and liquor license position, and the parking the site can offer. Since the median here sits so far above the nationwide one, any request near it must be backed by a build-out budget and a lease term that outlasts the loan. Lenders look for coverage of the debt payment after rent, and the appraiser will ask how much of the value belongs to a building a buyer could re-let and how much to a restaurant business that may not transfer. Keep those two apart, and show a ramp slower than the sponsor expects.