SBA 7(a) Coffee Shop Feasibility Study in Michigan

Small cafe loans and a franchise-heavy field

Michigan cafes and snack bars borrow modestly. The $152,700 median comes to just 0.68x what a coffee borrower nationally sees at the 7(a) median, and the median is the distinctive measure for this cell, while the usual loan runs from $50,000 to $345,000. The program approved 305 Michigan loans for the class from FY2017 to FY2026, worth $79.1 million, putting the state 6 among states, and coffee and snack concepts also rank 6 of 39 among Michigan asset classes. Franchise brands account for 48.5% of loans, so about as many deals carry a brand as do not.

One holder carries the book

The Huntington National Bank is far ahead on the lender table with 141 loans worth $23.2 million. Fifth Third Bank follows with 10 loans, Capitol National Bank with 8, and ChoiceOne Bank and Newtek Bank, National Association with 7 each. The field SBA keeps lists the current holder of each loan and gives no hint of what any holder requires. Oakland County has 72 loans, Wayne 40 and Kent 21, with Berrien and Washtenaw at 11 each; those three counties lead the table.

Outcomes and timing

For Michigan cafes the cancellation floor is 9.4% of approvals through FY2024, and 12.2% when loans never disbursed are counted, so loans that were approved but never disbursed add to the cancellation figure. Within the 120-loan funded cohort, the charge-off floor is 5.8% to date, and 4.2% inside five years after approval. Open loans may raise these. Annual volume fell to 19 loans in FY2020 and rose to 44 loans and $14.5 million in FY2024, with 25 loans in FY2026.

A Michigan cafe plan under 7(a)

The study must establish demand by daypart: morning commuters, students, shoppers or office workers, each with a different ticket. It has to count nearby espresso bars and drive-through chains, examine winter foot traffic, and show cost of goods and labour against the average check. For a franchised unit, the royalty, required equipment and the brand's own unit economics belong in the model; for an independent, the plan should show how a loyal clientele will be built. With a median near $152,700, equipment and leasehold work dominate the budget, and debt service coverage should hold in a slow opening season.