Restaurant Feasibility Study in the Riverside-San Bernardino-Ontario, CA Metro Area

Restaurants in the Inland Empire

Riverside-San Bernardino saw SBA approve 449 loans to full-service restaurants during FY2017 through FY2026, totalling $270.6 million. The class ranks 1 of 39 inside the area and the area ranks 14 of 821 nationally. The location quotient, 0.95x, is just under the national share, so restaurants here are the largest class by count without being over-represented relative to the country. Riverside County has 258 loans and San Bernardino County 191.

Loan size is where this cell departs from its neighbors on the coast. Its median is $335,000, which is 1.22x the figure for restaurants nationally, with quartiles at $100,000 and $800,000. The lower quartile is modest, which suggests many small operators, while the upper quartile is large enough to cover a full build-out. A study should say which end of that range the project belongs to.

Who holds the loans

Of the 449 loans, 395 were 7(a) and 54 were 504. The franchise share is 9.4%. Leading the 7(a) holders is U.S. Bank, National Association: 59 loans, $7.4 million. Bank of Hope follows at 38 worth $16.7 million, Northeast Bank (ME) 16 worth $1.5 million, Bank of America, National Association 13 worth $4.9 million with JPMorgan Chase Bank, National Association closing the list at 11 loans, $3.5 million. The first has the most loans yet small average dollars, a pattern of many modest-sized loans.

On the 504 side, Business Finance Capital has 14 loans at $12.6 million, The Mortgage Capital Development Corporation 12 at $10.6 million, California Statewide Certified Development Corporation 9 at $13.5 million and CDC Small Business Finance Corp. 8 at $8.6 million. Reading the Riverside holder rows correctly means treating each as a lender's book of business, past or present, rather than a statement of practice.

Floors and tests

For Inland Empire restaurants the cancellation floor is 12.7% on FY2017 to FY2024 approvals, with no ceiling published. Charge-off to date is at least 4.5% across a 176-loan cohort of FY2017 to FY2021 disbursements, and the five-year rate is not published either, because the cohort is too small. Neither missing value is zero, and we do not estimate either.

A study for a restaurant in this area should test traffic and trade-area demand in the specific county, the delivery of a lease at a rent the sales can bear, labor and food cost, and coverage at a loan near $335,000. Only Riverside County and San Bernardino County restaurant loans reach this page, each placed through the name of its project county in the July 2023 delineation; an unplaceable name would remove a loan from every metro and make 449 a minimum.