SBA 7(a) Coffee Shop Feasibility Study

Coffee lending in 7(a) has surged

Coffee shops drew 7,958 SBA loans through 7(a) across FY2017 to FY2026, worth $2.74 billion, and the growth since FY2020 is the striking part: 515 loans and $128.0 million that year, 1,241 loans and $518.1 million in FY2025, and 1,074 loans and $452.3 million in FY2026. 7(a) carries nearly all SBA coffee lending, so no metric separates this cell from the class by our distinctness margin, and none departs that far from the 7(a) program either.

The median loan is $225,000; the middle half runs from $69,925 to $443,750. Franchise share is 44.6%, and the larger loans in that range are likely franchise units on drive-through pads, while the small end funds equipment and working capital for independents. The Huntington National Bank is the giant of this table, with 1,060 loans and $275.3 million. TD Bank, National Association has 283 loans but $19.0 million, Newtek Bank, National Association 241 for a much larger $67.8 million, U.S. Bank, National Association 228 for $19.3 million, and Manufacturers and Traders Trust Company 200 for $27.8 million. California has 1,001 loans and Texas 902, followed by Florida with 493, Ohio with 377 and New York with 360.

Losses a lender has to plan for

Charge-offs reach at least 6.5% of the 2,671 coffee loans funded across FY2017 to FY2021; 3.8% failed inside five years. Cancellation sits between a floor of 11.6% and a ceiling of 13.0%. SBA's file does not explain the losses, but in coffee the usual cause is a site that never reaches its sales forecast. For a lender, that argues for a study that tests the location before the loan, not a projection built on a brand's best units.

What a 7(a) coffee study must test

No limitation line applies; the code is the borrower's industry. A feasibility study for a 7(a) coffee shop has to test demand from morning traffic and access, and from the chains and independents within a short drive; what the fit-out will cost, or what an existing shop is worth against its sales; debt service coverage at a realistic ticket count and labor cost; and, where the loan includes real estate, an appraisal of a building whose value to the next user may sit well below its cost.