SBA 504 Quick Service Restaurant Feasibility Study in Iowa

Nearly all franchised

Franchise brands account for 88.9% of Iowa's SBA 504 limited-service restaurant loans, which is the cell's defining metric and a share that leaves almost no room for independents. The file holds 36 approvals from FY2017 to FY2026 worth $19.9 million, a median loan of $512,500 that comes to 0.80x against restaurants elsewhere under 504, and a notably tight central half, from $335,500 to $573,750, reflecting standardized buildings.

Rank, lenders and counties

Iowa stands 17 among states for the class and quick service restaurants hold 2 of 39 in Iowa's asset list. Two development corporations hold the loans in the table: Iowa Business Growth Company with 19 loans and $10.9 million, and Siouxland Economic Development Corporation with 11 loans and $4.9 million. Polk County leads with 6 loans, Story follows with 5, and Johnson, Woodbury and four more counties show smaller counts, headed by 3 each for Johnson and Woodbury.

A spike and a pause

Approvals jumped to 14 in FY2022 with $8.8 million, a year that dwarfs the rest, then fell to 3 in FY2023, none in FY2024, and one each in FY2025 and FY2026. Iowa cancellations reach 20.6% of the earlier approvals, and the number holds once undisbursed loans are counted. Repayment cannot be judged, since no charge-off rate prints for lack of early funded loans.

What an Iowa restaurant study must test

With a franchise model dominant, the study should start from the brand's disclosed unit economics and then replace its averages with local facts: traffic counts, daytime workers, competing drive-throughs and the sales a new unit would need. The 504 structure finances land, building and equipment, so site control, utilities and zoning belong at the front, along with the construction bid. The franchisor's site approval and required design standards drive cost, and the plan should show whether the $512,500 median is a reasonable benchmark for this build. Winter weather may soften walk-in sales, and the monthly model should show it. Debt service must be covered with payments for the whole financed package, and the appraisal should test what another restaurant operator or a different use could pay for the building. The high franchise share also asks the study to show the operator's experience and the brand's support.