SBA 504 Restaurant Feasibility Study in Pennsylvania

The class that leads Pennsylvania's 504 book

Table-service dining sits at the top of Pennsylvania's own list of 39 classes, a standing that separates this cell from Pennsylvania's overall 504 record. From FY2017 to FY2026 there were 94 approvals worth $71.3 million. Pennsylvania is 12 among states on loan count. The median loan is $504,000, a ratio of 0.83x to the nationwide 504 figure, and half of the loans lie between $338,500 and $810,000. Franchising is uncommon at 5.3% of loans, so the typical borrower owns an independent dining room and is financing a building or fixed equipment.

Development companies and counties

Empire State Certified Development Corporation sponsored 28 loans worth $24.1 million and NEPA Alliance Business Finance Corporation 20 worth $8.5 million. Another 19 loans, worth $14.2 million, went through South Eastern Economic Development Company of Pennsylvania, Regional Development Funding Corporation 16 worth $10.6 million, and EDC Finance Corporation 6 worth $6.6 million. Average loan size differs markedly between sponsors, with the last of these the largest per loan. The list reproduces SBA's records and does not rank the companies' practices. Allegheny County has 19 loans, Philadelphia 9, and Berks, Chester and Lancaster 6 each.

Cancellations, and a rate we do not publish

Closing risk is real in this cell: cancellations took at least 18.3% of approvals from FY2017 to FY2024, and 23.9% is the ceiling once loans never disbursed are added. One figure is missing on purpose. Too few loans funded early to support a published charge-off percentage, so we give none and do not suggest the record is clean. Lenders should rely on the cancellation numbers and the wider evidence in the study.

Testing a Pennsylvania restaurant under 504

Because 504 financing is built around real estate and long-lived equipment, a study should begin with the site: ownership or lease, the condition of the building, and what a buyer of the property would pay if the restaurant failed. Demand work then counts nearby households, daytime workers and visitors, and the table-service competitors within reach, with a sales-per-seat estimate that comparable restaurants support. Food cost, labor and occupancy determine whether the operation covers its debt payments, so the model needs a slower-sales case. The high cancellation ceiling argues for showing that equity, permits and the construction budget are ready before approval, not after. The appraisal must support the property, and any renovation should be costed from quotes.