Restaurant Feasibility Study in Vermont

Vermont restaurants: tiny tickets, late losses

Vermont restaurant borrowers take very small SBA tickets. Their median loan is $90,000, only 0.33x the national full-service median, and the central half of Vermont approvals lies between $50,000 and $200,000. Dining is still Vermont's top SBA class, 1 of 39 on the state list, and a 1.06x location quotient keeps it near parity with the nation. In absolute terms the book is small: 104 approvals worth $15.8 million over FY2017 to FY2026, leaving Vermont 45 of 54 among states. Because our screen also holds each cell up to Vermont's own all-class record, not just to restaurants nationally, the low median does not by itself flag the cell.

Who lends in Vermont

Independent restaurants make up this book; franchise units are just 1.9%, and SBA 7(a) carries 98 approvals against 6 under SBA 504. Community National Bank holds 21 loans worth $2.5 million, TD Bank, National Association 16 worth $937,600, Manufacturers and Traders Trust Company 10 worth $1.9 million, Heritage Family FCU 8 worth $1.1 million and Union Bank 8 worth $839,500. Chittenden County leads with 32 approvals; Washington has 11, Franklin and Rutland 10 apiece and Lamoille 9. Annual volume has hovered between 4 and 18 approvals, and in FY2025 its 10 loans came to only $672,500.

Losses that came late

Vermont's charge-off floor is the outcome that matters: 11.7% of the 60 Vermont restaurants whose loans funded in FY2017 to FY2021 now sit in the written-off column, yet only 3.3% failed inside five years of approval, so most Vermont losses arrived after the early years. Cancellation, by contrast, is low at 6.8%, and floor and ceiling match because no FY2017 to FY2024 approval still waits to fund.

Thin capital and late losses describe restaurants that open well enough and then wear down. A Vermont restaurant study should therefore test staying power more than opening demand. Demand needs a full-year view of local and visiting diners by season and of the competing restaurants within reach. Cost should include the equipment replacement and building upkeep a small operator tends to postpone, not just the opening build-out. Coverage needs stress in later years, for a lost season or for food and labour costs that outrun menu prices, and a working capital reserve sized for the slow months. When the loan includes real estate, the appraiser should be shown what the building would fetch from a buyer outside the restaurant trade.

The Vermont record is SBA-guaranteed lending alone, under the borrower's industry code; restaurants financed by local banks without a guarantee are not counted, and every rate is a floor.