Restaurant Feasibility Study in the Salem, OR Metro Area

Salem: restaurants first, with very small loans

Between FY2017 and FY2026, Salem borrowers received 38 SBA-approved full-service restaurant loans worth $10.6 million. Salem is 125 of 821 areas on this class, and restaurants of this type come first at home, 1 of 39. Full-service restaurant is underweight in Salem: a 0.81x location quotient sits below the national share. Marion County, OR holds most of the loans, with Polk County, OR next. By county, Marion County, OR with 33 and Polk County, OR with 5.

The median Salem loan is $52,800; the middle half runs $30,000 to $350,000. Against the national class median, Salem stands at 0.19x, so loans run smaller than usual. For Salem, Loan Analytics holds back both program counts. Franchise share is not available for Salem, since Loan Analytics withholds it.

Two banks named

Columbia Bank (OR) holds more loans than U.S. Bank, National Association, which shows a very small dollar total. The 7(a) names are 10 loans for $1.6 million at Columbia Bank (OR) and 5 loans for $183,400 at U.S. Bank, National Association. Names in Salem are shown as SBA publishes them, yet say nothing of underwriting.

Loan Analytics suppresses cancellation and loss rates for Salem, so outcomes cannot be ranked. FY2018, 5 loans and $1.6 million and FY2019, 5 loans and $1.4 million appear in the yearly record. In Salem, thin counts hide the missing years. The cohort behind Salem cancellations is too small to report; it holds fewer than 30 loans. The July 2023 list of counties defines Salem, leaving unplaceable projects out.

Testing a Salem full-service restaurant project

The modest median of $52,800 is small, so the study should say what is being financed and what the owner contributes. A quick-opening small room needs reliable daypart demand, so lunch and dinner should be estimated separately and checked against competing rooms in Marion County. Food and labor cost should be priced against local menu prices. Debt service on a small loan still needs a cash cushion for the opening months. Where a building is leased, valuation turns on leasehold improvements, and the study should say what equipment could fetch for a lender if the business fails. If the loan finances equipment only, the file should show that the premises are secured by a lease of sufficient term..