SBA 504 Restaurant Feasibility Study in North Carolina

Size, rank and loan sizes of North Carolina restaurant loans under SBA 504

$40.8 million in gross dollars, spread over 48 loans in the 504 program for restaurant projects in North Carolina, is what SBA backed in North Carolina from FY2017 to FY2026. Standing: 24 for the North Carolina restaurant (SBA 504) approvals, and 4 of 39 among North Carolina's own asset classes. Midpoint size: $697,000. Relative to SBA 504 restaurant lending nationwide, North Carolina runs at 1.15x on the median, a heavier ticket size. Between $430,250 and $1.2 million lies half of the approvals across North Carolina. Franchised borrowers account for 8.3% of the 48 loans. Neither the $697,000 median nor any other metric across 48 North Carolina restaurant loans stands out from both parents, so North Carolina's lenders, counties and years carry the restaurant page.

Lenders, counties and timing in North Carolina

The certified development companies with the most North Carolina restaurant loans are Business Expansion Funding Corporation (33 loans, $27.4 million) and Carolina Business Capital, Inc. (7 loans, $4.7 million). The North Carolina restaurant table follows whoever owns each North Carolina loan; the originator of those 33 loans may differ. North Carolina's restaurant loans sort by county as follows: Dare with 7, Buncombe with 5, Wake with 5 and Mecklenburg with 4. Year by year in North Carolina, approvals peaked at 9 loans, worth $8.8 million, in FY2022, with FY2026 at 8 loans and $8.5 million; the series began in FY2017 at 6.

North Carolina: cancellations, charge-offs and one restaurant coding limit

Cancellations following approval run 12.8% or more for FY2017 to FY2024 North Carolina restaurant approvals; add those yet undisbursed and the ceiling becomes 20.5%. Too few of the 48 restaurant loans funded in North Carolina between FY2017 and FY2021 to support a charge-off figure for restaurants, and so none is published; the gap is not a zero. Lenders should read these North Carolina rates, drawn from 48 loans, as minimum values and never as the last word. No special feature of the coding skews restaurant numbers for North Carolina, though SBA sorts North Carolina clients by industry code, and a restaurant operator among the 48 can be filed under a neighbouring North Carolina class.

What a North Carolina restaurant study must test

In North Carolina, two loans sit behind each of the 48 504 restaurant projects: one from a North Carolina certified development company, one from a separate North Carolina lender. A restaurant study must prove that the acquired restaurant property and its improvements can support both, with North Carolina cash from the borrower. A North Carolina restaurant feasibility study measures covers relative to trade-area population and rivals. Equipment, hood and exhaust and seating fit-out drive restaurant budgets in North Carolina. The coverage test runs on $697,000 and again at $1.2 million, with a slower case, so a North Carolina lender sees where restaurant the margin narrows. Valuation for restaurant property in North Carolina turns on occupancy cost relative to revenue. Institutions such as Business Expansion Funding Corporation appear in this North Carolina record; the record is history, and what Business Expansion Funding Corporation or any other North Carolina lender wants from a restaurant study is its own to state.

Daniel Smith, MAI, signs the North Carolina restaurant study: the $40.8 million backed before is orientation, while the restaurant study itself answers the project questions; North Carolina approval is never assured here.