SBA 7(a) Coffee Shop Feasibility Study in Tennessee

A franchise-heavy cell with a surge in FY2025

In Tennessee the program backed 123 coffee shop and snack bar loans over the span from FY2017 to FY2026, worth $63.8 million. Three features set the cell apart. First, the typical loan is large for the class: $361,200 at the median, which is 1.61x the national level, with the central band between $150,000 and $600,000. Second, 58.5% of loans carry a franchise brand, so a study here often starts from a franchisor's template. Third, volume exploded late: 39 loans and $20.2 million in FY2025, against 3 loans and $645,000 in FY2017. Tennessee ranks 21 among states, and the class is fifth of 39 within the state.

Holders and counties

The Huntington National Bank is listed as holder of 20 loans worth $8.2 million. Pinnacle Bank holds 8 worth $6.1 million, Citizens Bank holds 8 worth $3.1 million, United Community Bank holds 5 worth $2.6 million and Brightbridge, Inc. holds 5 worth $999,600. Those are the holder names SBA reports and they imply nothing further about anyone's lending standards. Davidson County has 21 loans and Knox County 20, followed by Sevier with 10, Sumner with 9 and Williamson with 8. The Nashville and Knoxville areas therefore carry most of the activity.

Cancellations, and a rate we cannot print

At least 11.8% of approvals through FY2024 were cancelled, and 14.7% once undisbursed loans are added in. The charge-off rate for the earliest funded loans is withheld on this page, because too few loans qualify to publish a rate responsibly. That withheld rate is not a zero and must not be read as one; it is simply not measured. Because most of the big FY2025 wave is so recent, nothing in the record yet says how it will perform.

A study for a Tennessee coffee shop has to be honest about a crowded category. It should count drive-through and cafe competitors within the trade area, test the daypart mix between morning commuters and afternoon visitors, and show how sales ramp in the first year. When a franchise is involved, the franchise fee, royalties and required build-out belong in the cost budget, and the franchisor's published unit economics should be set against what comparable Tennessee sites actually achieve. Tourist-driven locations near Sevier County need a seasonal cash-flow case. Coverage should be tested with weaker traffic, and the appraisal will separate equipment and leasehold improvements from any value attached to the brand. Nothing here implies approval.