SBA 504 Restaurant Feasibility Study in Florida

Restaurants as real estate

SBA 504 is the program for fixed assets, and in Florida it finances full-service restaurants more often than in any state but one: the cell ranks 2 for number of 504 loans, and full-service dining is the first-ranked class of all 39 in Florida. The file holds 271 approvals since FY2017, worth $302.3 million.

Loan size

The median of $813,000 is 1.34x the nationwide 504 median for restaurants, and the central loans run from $453,500 to $1.5 million. Franchised restaurants account for 10.0% of loans, so most of these are independents.

Development companies

The 504 table lists the certified development companies attached to the loans. Of those, Florida First Capital Finance Corporation, Inc. has 139 and Florida Business Development Corporation has 114, together far ahead of Sunshine State Economic Development Corporation with 14. SBA's file names the company attached to each loan, a fact that is silent on how any of them decides. Counties are spread out: Pinellas has 25 loans, Saint Johns 24, Broward 19 and Palm Beach 15, then Duval and Miami-Dade 14 each.

A strong, steady stream

Volume stepped up after FY2019. From 34 loans in FY2020 the count stayed at 30 or more through FY2025, and FY2026 reached 27 loans with $44.3 million, the largest dollar year in the cell.

The floors split in two

This is the cell's real feature. Cancellation is at least 16.8% for FY2017 to FY2024 approvals, and 28.0% if undisbursed loans are counted, so a large share of approved projects never close. Yet the 94 funded between FY2017 and FY2021 carry no charge-offs: 0.00% to date, 0.00% by year five. Both are floors, and a zero is not a promise about open loans.

What a Florida restaurant ownership study has to test

The study should treat the restaurant and the property as two investments. For the operation: covers, check average, seasonality and labour. For the property: price per square foot against comparable buildings, the cost of repairs and the resale market for a restaurant building, whose alternative uses are limited. Because many approvals do not close, timelines for permits, inspections and contractor schedules matter. Loan payments should be covered with a slow first year.