SBA 504 Restaurant Feasibility Study in Georgia

A larger ticket than the national 504 restaurant

Georgia's full-service restaurants rank second among the state's 39 asset classes in SBA records, and the 504 program's share of them is the part this page isolates. The typical Georgia loan is $740,000, which is 1.22x the 504 median for restaurants nationally, so a Georgia project tends to borrow more than its counterpart elsewhere. Half the loans fall between $398,000 and $1.1 million. The record totals 123 loans and $115.4 million, and Georgia stands 9 among states for the program's restaurant lending by number of loans.

Franchise-affiliated borrowers account for 21.1% of the loans, a meaningful minority, so a branded concept has company in the record but does not set its tone. Fulton County has 20 loans, followed by Chatham, Cobb and Richmond with 10 each, DeKalb with 8, Gwinnett with 7 and Clarke with 4.

Development companies behind the loans

Four organisations hold most of the book in SBA's files. Florida Business Development Corporation holds 27 loans worth $17.8 million, CSRA Local Development Corporation holds 23 worth $22.9 million, while 20 loans each sit with Capital Partners Certified Development Company ($24.5 million) and Small Business Access Partners, Inc. ($15.3 million). Georgia Certified Development Corporation holds 11 worth $16.5 million. These are holdings as SBA records them and carry no implication about how any of these organisations judges a project. Annual approvals peaked at 25 in FY2022, with $25.7 million, then dropped to 10 in FY2023 and 9 in FY2024.

Cancellation is where this cell is most striking. The cancellation floor on Georgia restaurant approvals made through FY2024 is 15.9%, and the ceiling reaches 18.7% when loans never disbursed are included. Charge-offs are quiet by contrast: across the 52 loans in the early Georgia restaurant cohort, SBA shows nothing charged off: 0.00% to date and the same at five years. The record therefore shows no losses to date, which is not a promise that none will come.

Questions a Georgia restaurant study must answer

Because the 504 structure finances real estate and long-lived equipment, the study has to speak to the building as well as the menu. It should show the sales a site can sustain given daytime population, evening traffic and the nearby supply of seats, then set the payment on the whole financing against those sales leaving a cushion for a sluggish opening year. With one in five loans tied to a franchise, say whether brand fees and required fit-out are in the budget. A high cancellation rate also argues for sound cost estimates and a firm schedule before approval, since projects that stall do not reach funding. The appraisal should value the property on its income and on its replacement cost, and the two should be explained when they differ.