SBA 504 Restaurant Feasibility Study in New York

Smaller than the nation, and independent

New York's full-service restaurant file under SBA 504 reads as a market of small, independent operators. Its median loan of $505,000 is 0.83x the national 504 figure for sit-down restaurants, with a central half stretching $279,500 to $1.1 million, and franchising accounts for just 2.1% of the 142 loans approved from FY2017 to FY2026. Together they reach $126.4 million in gross dollars. Among the 39 classes in New York, full-service restaurant takes first place, and New York stands 7th among states for the class by count, so the state is a leader inside its own borders and a contender nationally.

One development company dominates

The concentration among holders is the sharpest feature of the page. Empire State Certified Development Corporation has 115 of the loans, worth $96.3 million, so the local 504 channel for sit-down restaurants runs largely through a single institution. Trenton Business Assistance Corporation follows with only 10 loans but $22.1 million, a much higher average. Business Initiative Corporation of New York has 7 loans and $5.0 million, and Greater Syracuse Business Development Corporation has 6 and $1.5 million. Counties are dispersed beyond New York City: Suffolk shows 13 loans, Erie 12, New York County 12, Nassau 10, and Kings, Saratoga and Westchester 8 each. Upstate and Long Island carry as much of the precedent as the boroughs.

Cancellation is the watch item

Post-approval cancellation is floored at 13.6% in the New York group, and the ceiling is 16.9% when undisbursed loans are counted, a high mark for this class. The early funded group totals 61 loans, and charge-offs so far are floored at 1.6%, against 0.00% when measured over a five-year span. Both are minimums. Annual approvals moved from 17 loans and $7.7 million in FY2017 to 18 and $11.4 million in FY2021, and 11 and $13.0 million in FY2026, so loan counts have fallen while dollars have risen.

What a New York restaurant study tests

Since many of these projects involve buying or building the property, a feasibility study should separate the real estate decision from the restaurant concept. It must test foot traffic or daytime population on the specific block, the lease alternatives, rent and occupancy cost compared with owning, and construction cost in a high-cost state against a ticket near $505,000. Covers, average check and labor cost need a downside case that still serves debt. The appraiser will look at the building as collateral, so the study should be explicit about what the property is worth without the tenant. Program rules on occupancy and structure are matters for the development company, and this page states none in numbers.