Restaurant Feasibility Study in the San Francisco-Oakland-Fremont, CA Metro Area

The Bay Area restaurant record

Restaurants are the largest SBA class around San Francisco and Oakland: 574 loans from FY2017 to FY2026, worth $342.3 million, placing the class 1 of 39 locally and the area 10 of 821 nationally for full-service restaurant lending. The location quotient is 1.35x, so the share of area loans going to restaurants exceeds the national share by a clear margin. Alameda County has 208 of the loans, San Francisco County 166, Contra Costa 85, San Mateo 78 and Marin 37.

Loans here run larger than the class elsewhere: $340,000 at the median, 1.24x the national figure, with the quartiles landing at $150,000 and $782,625. We hold no rent data and supply none, so the study must establish the occupancy cost for the actual site and prove that projected sales can pay for it.

Lenders, programs and franchises

The split is 499 loans under 7(a) and 75 under 504. The franchise share is 4.9%, low for a restaurant class and a sign that independent operators dominate the area. On the 7(a) side the list begins with Bank of Hope (41 loans, $19.0 million) and U.S. Bank, National Association (44 loans, $10.1 million), then Wells Fargo Bank National Association (37 loans, $8.9 million); Main Street Launch (34 loans, $7.3 million); JPMorgan Chase Bank, National Association (28 loans, $5.8 million).

For 504, The Mortgage Capital Development Corporation shows 37 loans at $35.3 million, Capital Access Group, Inc. 16 at $15.2 million, Business Finance Capital 9 at $7.6 million and Bay Area Employment Development Company 6 at $5.8 million. Holder names in the Bay Area table come from SBA files on loans held now or in the past; they describe activity, and no borrower should take them as a statement of what any institution will do.

Outcomes and what to test

Dropping out before funding has a floor of 12.9% across approvals through FY2024; the matching ceiling is withheld, so no figure appears for it. Among 240 disbursed FY2017 to FY2021 loans, at least 7.1% show a charge-off so far, 3.8% inside five years of approval; read them as minimums. Several Texas restaurant metros show higher charge-off floors, which a lender may weigh, though a downside case is still needed.

A feasibility study here has to test sales per square foot against a high cost of space, labor cost, the concept's differentiation in one of the most crowded restaurant markets in the country, and the coverage ratio on a $340,000 request, the median. Matching works county by county: Alameda, San Francisco, Contra Costa, San Mateo and Marin restaurant loans are in, because OMB listed those counties in July 2023, while a loan with an unplaceable county is in no metro and the 574 is a minimum.