SBA 7(a) Coffee Shop Feasibility Study in Arizona

Coffee shops and snack bars rank 8 of 39 among Arizona asset classes, and Arizona is fifteenth for 7(a) lending to the class. FY2017 to FY2026 brought 179 approved Arizona loans worth $82.3 million. A median of $349,900 stands at 1.56x the nationwide 7(a) coffee median, with $144,650 to $544,900 as the middle half. A franchise flag appears on 57.0% of loans. With 57.0% of loans flagged as franchised, branded units make up a large part of this cell, and the median loan is 1.56x the nationwide coffee median.

Concentration and lenders

Maricopa County has 135 of the 179 loans, Pima 21, and no other county more than 4, with Cochise, Mohave and Yavapai at 4 each. Beyond those two counties, lending is thinly spread. The Huntington National Bank holds 23 loans worth $7.8 million, Midwest Regional Bank 11 worth $4.4 million, Arizona Capital Source and JPMorgan Chase Bank, National Association 8 each, worth $1.6 million and $1.4 million, and Bank Five Nine 7 worth $10.5 million, a very high average. Each is an SBA record of loans held.

A late surge, and a split in the loss figures

Approvals were 8 in FY2019 and then rose to 30 loans and $21.2 million in FY2025 and 29 loans and $12.9 million in FY2026. Cancellations in Arizona took 12.5% as a minimum of the approvals dated FY2017 to FY2024, and 13.3% when undisbursed loans are added. Of the 56 loans funded in FY2017 to FY2021, a total of 7.1% at the least are charged off now, though 1.8% were by year five, so most losses came after the fifth year. Open loans can raise both floors.

What an Arizona coffee study must show

The study should prove the transaction count a larger note requires: cars per hour at the drive-through or pedestrian flow at the kiosk, morning versus afternoon demand, and the competing chains within the corridor. Sales through the year are rarely level, so seasonality should be modeled. For a franchised unit, the brand's fees, required equipment and remodel cycle need to be set against sales, and for an independent, repeat-customer evidence. The payment should be covered at sales below plan, and the late-arriving charge-offs suggest keeping reserves for the later years. An appraisal should value the lot or lease apart from the business. SBA states program terms.