SBA 7(a) Coffee Shop Feasibility Study in South Carolina

Coffee in South Carolina: brand-driven, expensive, and harder on lenders

South Carolina coffee-shop and snack-bar lending has a distinctive profile: heavy franchising and above-average loan size. Through 7(a), SBA approved 104 South Carolina coffee-shop loans across FY2017 to FY2026, worth $39.1 million, and franchised units account for 63.5% of them. The median loan of $317,000 comes to 1.41x of the 7(a) midpoint seen nationwide for coffee and snack operators, and the middle of the pool stretches from $91,250 to $529,750. By count the state is 25 among states, and coffee shops sit at 6 of 39 within the state. A buyer of a franchised drive-through or cafe format carries a build-out budget set partly by the franchisor.

Holders and places

Heading the table, Huntington (formally The Huntington National Bank) carries 16 loans and $6.8 million. TD Bank, National Association holds 9 yet only $364,400 in total, so its notes are tiny, while United Community Bank holds 7 for $5.4 million, TowneBank 6 for $1.3 million and First Bank of the Lake 5 for $2.5 million. These entries show the holder SBA lists now. York County has 16 of the loans, Greenville 12, Beaufort 11, Charleston 10 and Horry 9, so the loans sit in both inland and coastal counties. Volume grew in recent years: only $525,300 in FY2017, then $6.1 million in FY2023, $8.0 million in FY2024 and $6.7 million in FY2025.

Where the losses show up

Cancellations reach 10.5% on the floor measure and 13.2% on the ceiling. The charge-off rates are the weakest feature of the cell: 9.1% to date for the 33-loan cohort disbursed in the FY2017 through FY2021 span, and 6.1% inside five years. Open loans may still deteriorate, so treat that as a minimum. The cohort is small, so a handful of failures moves the rate, and the figure should be read as a caution about thin-margin concepts and not as a forecast for a particular borrower.

What a coffee-shop study here must test

A study must begin with the format: a drive-through kiosk, a sit-down cafe, or a snack bar inside a larger use. Each draws traffic differently, so the demand section should rely on vehicle counts at the exact site, morning commute patterns, nearby employers and competing coffee operators within a few minutes' drive. Where a franchise is proposed, the royalty, marketing fund and required equipment must be set against a sales forecast built from tickets per hour and average check, and the payment should be shown covered after labor, a major cost for this kind of business. The higher charge-off rate in this cell makes sponsor liquidity and the operating experience of the manager especially relevant, so both belong in the document. An appraisal will value either the leasehold improvements or the pad site, and the study should specify which, along with the equity the owner puts in.