SBA 7(a) Coffee Shop Feasibility Study in Montana

Few cancellations, small loans, a notable franchise share

Montana's coffee shops and snack bars take small SBA 7(a) loans and rarely drop them. The median loan is $132,800, only 0.59x the nationwide level, and typical loans span $50,500 to $231,300. Among 39 approvals totalling $8.7 million over the FY2017 to FY2026 window, cancellations through FY2024 stand at 0.00% as a floor and 0.00% as a ceiling, which is rare. Franchise affiliation is 20.5% of loans, a notable share for a small-market food class. Montana is 41 among states on loan count, and the class sits sixth of 39 inside the state.

Counties and lenders

Counting loans by county, Yellowstone leads with 13, then Gallatin with 8 and Flathead with 6, which is to say Billings, Bozeman and the Kalispell area carry the class. Lewis and Clark has 3, Cascade and Fergus 2, and Carbon, Custer, Lake and Pondera 1 each. Glacier Bank: 7 loans, $521,100. First Interstate Bank: 5 loans, $826,900. These are today's holders, which says nothing about any bank's approach. The average loan at First Interstate is higher than at Glacier, so the lenders are not interchangeable.

Uneven calendar

FY2021 was the busiest year, with 9 loans and $1.5 million. FY2019 and FY2023 each show 0 loans and $0, and FY2022 shows a single loan of $891,800, a far larger ticket than the class median. Late years improved, with 6 loans and $703,000 in FY2024, then 4 loans and $1.7 million in FY2025 and 5 loans and $2.0 million in FY2026. A loss rate for the early loans is withheld because too few of them funded, which is different from a rate of zero.

What a Montana coffee study must test

Drive-through and walk-up cafes in Montana depend on seasonal tourism and local commuters, and the study should show both. Vehicles passing the door, nearby employers and students, and rival cafes within a short drive should be counted, then converted into transactions and average ticket. Costs worth modelling are rent, labour at the wage level of the area, supplies and equipment, and the brand fees if a franchise is used. Winter and shoulder-season months must be shown separately, as they may not cover the payment. Because the loans are small, lean documentation is acceptable, but every revenue assumption should be traceable to a count or a comparable shop.