SBA 504 Coffee Shop Feasibility Study in California

California coffee shop and snack bar lending in SBA's records

In California, SBA 504 approved 42 loans in the coffee shop and snack bar class. Across FY2017 to FY2026 in California that came to $23.9 million gross. Counting coffee shop and snack bar loans, California ranks 1 across states for coffee shop and snack bar under this program, and coffee shop and snack bar sits 19 of 39 among California classes. A median of $446,500 is 1.08x of the national coffee shop and snack bar median under SBA 504, so California runs close to the norm. For coffee shop and snack bar in California, the middle half spans $336,750 to $739,000, and franchise flags mark 26.2% of California coffee shop and snack bar loans.

Who holds the coffee shop and snack bar loans, and where

The largest named coffee shop and snack bar holder in California is The Mortgage Capital Development Corporation: 8 loans worth $4.4 million; behind it CDC Small Business Finance Corp., 6 loans ($4.6 million); Business Finance Capital, 5 loans ($3.5 million). Holders in California are those SBA currently lists. The California coffee shop and snack bar county count starts with Los Angeles at 12, Alameda at 4, Orange at 2, Sacramento at 2, San Bernardino at 2.

Timing of California approvals

The California coffee shop and snack bar calendar shows 7 loans ($3.4 million) in FY2019, then in California 4 in FY2020 ($3.4 million), and in California 2 in FY2021 ($1.9 million), 5 in FY2023 ($3.1 million) and 4 in FY2024 ($1.5 million) against California's peak of 7 in FY2019.

Coffee shop and snack bar cancel and charge-off floors

In California, approval did not always mean a coffee shop and snack bar loan: of FY2017 to FY2024 California approvals, at least 14.7% ended in California cancellation, with 17.6% the ceiling if undisbursed coffee shop and snack bar loans are added. The coffee shop and snack bar cohort funded in California is too small, so no stable loss percentage exists here for California loans of this class funded FY2017 to FY2021; the rate is withheld, and California lenders should not read that silence as zero.

California coffee shops under SBA 504

A coffee or snack-bar loan under SBA 504 finances real estate, which is unusual for this trade, so the California study must justify owning the site: morning traffic, drive-through capacity, rival cafes and chains, and daypart sales that cover a mortgage-sized payment. Build cost belongs beside the $446,500 median, and coverage should be shown at a ramp slower than the owner is hoping to see. An appraiser will want to know whether another food user could take the building, so the study should describe that fallback.

California cafes and snack bars

Cafe and snack-bar loans carry no coding caveat; the California loss rate is withheld, so the study builds its own downside.