SBA 504 Restaurant Feasibility Study in South Carolina

Restaurants are second among South Carolina's 504 classes

Full-service restaurant is 2 of 39 among South Carolina's classes under 504, although the state ranks only 30 against others by count. The 31 loans total $33.0 million, with a midpoint of $768,000, 1.27x the national 504 restaurant midpoint, and the middle half from $455,000 to $1.3 million. A quarter of the loans, 25.8%, are franchised.

Three development companies

Appalachian Development Corporation holds 9 loans worth $10.6 million. Provident Business Financial Services, Inc. holds 8 worth $8.2 million, and Certified Development Corporation of South Carolina holds 7 worth $4.1 million. Those are the present holders per SBA. Charleston and Greenville counties each have 5 loans, Lexington 4, and Spartanburg 3, tracing the state's larger metros and the coast. The calendar is lumpy, with 6 loans in FY2021 and again in FY2026, which brings $7.9 million so far.

What the page leaves blank

Both the unfunded-approval share and the charge-off share are absent for South Carolina restaurants, since each cohort sat below SBA's minimum. The class is full-service restaurants only, so a quick-service concept should not use this record. Because the blanks carry no information, a lender must rely on the project's own documents.

What a South Carolina restaurant study has to test

Since 504 funds the building, begin with the site. Show the parcel or building, the purchase or construction cost, the equity the owner puts in, and the zoning and parking. Then show the dining market: the residents within a short drive, the tourists in coastal and mountain areas, and the restaurants competing for them. Seasonality is strong near the beaches, so present monthly sales and the cash held through the slow months. Cost the kitchen, the hood and the fire-suppression system, which are expensive to retrofit. A concept's average check and covers per day should be built bottom-up. Coverage must hold at stabilised sales and at a lower case. The appraisal should show the value to a different restaurant operator or to a retail user, since the building must stand on its own if this concept fails. It should also note the condition of the roof, the parking and the utilities, which a second owner would inherit.