Restaurant Feasibility Study in the Salt Lake City-Murray, UT Metro Area

A restaurant file with an unusually strong 504 side

The feature that sets Salt Lake City-Murray apart is the role of SBA 504: 39 of its 158 full-service restaurant loans are 504 loans and 119 are 7(a), so a good many borrowers here are buying or building the property. Among 821 areas it stands 41st for the class, and restaurants top its list of asset classes. Gross dollars were $106.0 million from FY2017 to FY2026. A low location quotient, 0.68x, means restaurants are a thinner slice of Utah's metro loans than of loans nationally.

The median loan, $300,700, is 1.09x the national median; the middle of the distribution stretches from $100,000 to $915,850. Franchise flags appear on 10.1% of loans, leaving independent owners as the typical borrower.

The two holder groups

Because so much of the lending is 504, the certified development companies matter here. Mountain West Small Business Finance is the holder of 32 loans worth $29.0 million, and Intermountain Business Lending, Inc. of 7 worth $7.6 million. On the 7(a) side, SBA lists Zions Bancorporation, National Association with 16 loans and $4.8 million, Mountain America FCU with 14 and $2.0 million, America First Federal Credit Union at 12 loans and $12.8 million, First Utah Bank also at 12 and $6.4 million, and Celtic Bank Corporation with 9 and $4.3 million. America First's loans are the largest on average. These are holdings as SBA records them today and offer no view of what a holder wants from a borrower.

Cancellation was comparatively light: 7.0% or more of approvals across FY2017 through FY2024. Salt Lake has a withheld cancellation ceiling and a withheld loss rate to date; neither is on this page, and neither is a zero. Approvals moved between 10 and 22 a year for most of the period, with 22 in FY2019 worth $16.8 million and 28 in FY2025 worth $17.6 million.

What a Salt Lake restaurant study has to test

When the borrower is buying or building the premises, the study must treat the project as two things: an operating restaurant and a piece of real estate. For the operating side it tests the trade area, the competing seats, the pull of downtown, the suburbs along the valley and the visitor traffic, and the revenue per seat needed to carry both rent-equivalent cost and debt service. For the property side it tests build cost, entitlements and the alternative uses of a restaurant building if the concept fails, which governs what an appraisal can credit. Debt service coverage needs the ramp of a new room. Loans whose county cannot be matched to the July 2023 list never enter Salt Lake figures, so every count here is on the low side.