SBA 504 Restaurant Feasibility Study in Minnesota

Where Minnesota sits among 504 restaurant lenders

In Minnesota's SBA records the full-service restaurant leads every other asset class, at rank 1 of 39, and the SBA 504 slice of that class is substantial on its own: 164 loans approved between FY2017 and FY2026, worth $114.2 million in gross dollars. Among states, Minnesota ranks 5 for the number of SBA 504 loans to full-service restaurants. What this page isolates is the 504 program alone, so it says nothing about the 7(a) loans that restaurants in the state also take, and it should be read beside the state's other pages rather than in place of them.

The median 504 restaurant loan in Minnesota is $494,000, or 0.82x the 504 national figure for restaurants, so a Minnesota project tends to sit below the national centre. Half of the loans fall between $307,500 and $850,250. Franchise-affiliated borrowers account for only 4.9% of these loans, so most borrowers here are independent operators.

Who holds the loans and where they sit

The holders below are as SBA lists them today, and in Minnesota they form a short list of certified development companies. Midwest Business Finance Corporation leads on count with 57 loans and $31.8 million, though the Twin Cities-Metro Certified Development Company's 39 loans carry more dollars, $33.6 million. Amplio Economic Development Corporation follows with 29 loans and $21.5 million, while the Southeastern Minnesota 504 Development Corporation has 17 loans worth $9.5 million and the Central Minnesota Development Company 12 worth $8.0 million. Those counts are SBA's record of holdings, not a view on how any holder underwrites. By county, Hennepin leads with 45 loans, then Ramsey with 13 and Washington with 10, with Anoka at 9 and Olmsted at 7. Lending peaked at 31 loans in FY2019 and stood at 12 in FY2026.

Cancellation reached a floor of 7.7% across the Minnesota restaurant loans approved through FY2024, climbing to 9.9% once loans that were approved but never disbursed are treated as cancelled. Among the 85 loans in Minnesota's earliest funded vintages, charge-offs stand at 3.5% or more, and 2.4% did so inside five years of approval. Every one of these is a floor: loans still on the books can fail later, so for a lender they mark a minimum of what has gone wrong. Charge-off is the one measure where the cell departs from Minnesota's record across classes and from the 504 restaurant class nationally.

What a Minnesota restaurant study has to test

Any study backing a 504 restaurant loan here must show that the dining room can carry fixed debt on real estate: sales per seat supported by the trade area, a realistic ramp after opening, and coverage of the payment on the senior lender's portion and the development company's portion together. Because this program finances property and long-lived equipment, the appraisal of the building and the land matters as much as the sales forecast, and a study should reconcile the two. Construction and fit-out cost should be tested against loans that commonly land near $494,000, and the study should say plainly what happens to coverage in a slower year. The record above shows what SBA has financed; it does not show what any single project will earn.