Restaurant Feasibility Study in the Providence-Warwick, RI-MA Metro Area

Small restaurants, many in the Ocean State

The Providence area records 307 sit-down restaurant loans between FY2017 and FY2026 worth $111.8 million, and the class heads its local list at 1 of 39. The area is 23 of 821 for the category, and a location quotient of 1.47x says restaurants are a larger piece of local SBA lending than the national picture. What most distinguishes the cell is size: $150,000 is the median, a mere 0.55x the class midpoint nationwide, and the quartiles sit at $79,000 and $452,000.

A heavy 504 presence and few franchises

The 307 loans comprise 238 under SBA 7(a) and 69 under SBA 504, so the 504 program carries a larger part of the area's restaurant lending than the program might be expected to in a market of this kind. Three development companies lead that side: Ocean State Business Development Authority (29 loans, $18.1 million), Bay Colony Development Corporation (18, $9.4 million) and New England Certified Development Corporation (11, $7.0 million). Franchised stores make up just 3.3% of loans, so this is a market of independent kitchens in leased or owned buildings.

Banks and counties

For 7(a), SBA shows Santander Bank, National Association with 50 loans worth $15.4 million, Eastern Bank with 20 worth $3.3 million, Citizens Bank, National Association with 16 worth $6.9 million, Beacon Bank and Trust with 16 worth $1.3 million and Bristol County Savings Bank with 15 worth $1.8 million. The lists show holders in SBA's data, nothing about their credit rules. Providence County, RI leads with 121 loans, then Bristol County, MA with 70, Kent with 37, Newport with 33, Washington with 30 and Bristol County, RI with 16. Because the area crosses a state line, a study should use local rules from each side where the site sits.

Providence outcomes

The cancellation lower bound is 15.4% for FY2017 to FY2024 approvals, and the charge-off floor is 6.8% across a disbursed cohort of 133 loans from FY2017 to FY2021. Kept out of the table are a cancellation ceiling and the rate for charge-offs inside five years, both resting on very few loans; neither is a zero. The Providence area is assembled from project counties found on the 2023 metro map, so loans from an unmatched county are not included. Anyone financing a restaurant here must test covers against competing seats nearby, the seasonal swing of a tourism-linked market, the cost of fitting out older buildings, debt service coverage at a modest loan, and the appraisal.