SBA 7(a) Coffee Shop Feasibility Study in Missouri

Small tickets, uneven results

Missouri coffee shops and snack bars show the thin side of SBA 7(a): a median loan of $270,000, or 1.20x what a coffee operator nationally borrows at the median under 7(a), with the central half spanning $125,500 to $580,300. The 127 approvals from FY2017 to FY2026 total only $56.3 million. The class is 7th of 39 in the state and the state is 19th among states by count. Franchise brands appear in 48.8% of loans, close to an even split between chain and independent operators.

The outcome record is the page's sharpest feature

Charge-offs to date are floored at 9.8% among the 41 loans in the early funded group, while the number reached within five years of approval is 7.3%. By comparison, post-approval cancellation is floored at 7.4%, with the same figure as a ceiling. These are among the higher floors a lender will see for a small food-service class, and they matter for a borrower because the cohort is modest in size and open loans may still add to the numbers. The yearly flow has been rising, from 9 loans and $2.0 million in FY2017 to 10 and $4.2 million in FY2021 and then 18 loans and $10.6 million in FY2026, so the exposure is growing.

Where the loans sit

Jackson County shows 18 loans and Saint Louis County 15, with Saint Charles at 12, Greene and Jasper at 9 each, Boone and Clay at 7, Platte at 5 and Buchanan and Cass at 4. The holders SBA names are The Huntington National Bank with 12 loans and $6.3 million, The Central Trust Bank with 10 loans but only $976,000, United Community Bank with 8 and $3.8 million, OakStar Bank with 8 and $2.6 million, and The Bank of Missouri with 5 and $1.4 million. Central Trust's average ticket is the smallest on the list. The names describe where SBA lists these loans today.

What a Missouri coffee study must test

At this scale a feasibility study is mostly a test of sales volume. It should establish how many transactions per day the location can plausibly draw, from commuter traffic, a nearby office or campus population or pedestrian flow, at an average ticket that supports the product mix. It should test the competing cafes within walking or driving range, fit-out and equipment spending relative to a loan near $270,000, and coverage of the payment even in a sluggish opening year. Given the charge-off floor above, a lender will look hard at working capital. Whether the shop is a franchise or an independent changes the cost and the support available, and the study should say which it assumes.