SBA 7(a) Coffee Shop Feasibility Study in Wisconsin

Small cups, spotless record so far

Wisconsin coffee shops and snack bars borrowed 125 times under 7(a) between FY2017 and FY2026, for $40.3 million in all. The category holds 9 of 39 on Wisconsin's own list, and the state is 20 among states. At $175,000 the median is only 0.78x of the nationwide mark, and half of all approvals fall from $55,000 to $400,000, so most are build-out and equipment loans rather than real-estate purchases. What stands out most is outcome: of 45 loans in the earlier funded cohort, none has been charged off, a 0.00% floor both to date and inside five years. A franchise flag is attached to 28.0% of loans.

Lenders and counties

The Huntington National Bank dominates with 18 loans and $9.5 million. Wisconsin Women's Business Initiative Corporation follows at 10 loans and $1.4 million, then Nicolet National Bank at 9 and $1.9 million. Waukesha State Bank has 7 loans worth $1.7 million, and U.S. Bank, National Association also has 7, worth merely $223,800. Presence on this list reflects SBA's record of each loan's holder and carries no judgment about any institution. Milwaukee County accounts for 17 loans, Outagamie 15, Waukesha 14, Dane 11 and Brown 9.

Cancellations, the weaker number

Where this cell is less comfortable is before closing. At least 14.9% of approvals made through FY2024 never went forward, and if every loan not yet paid out counts as cancelled the ceiling is 16.0%. A zero charge-off rate is welcome, but it describes only borrowers who closed, and open loans can still fail later, so the 0.00% is a floor, not a promise.

What a coffee shop study should test

A coffee shop lives or dies on traffic at specific hours, so the study should be built around counts: morning commuters, office workers, students and the drive-by flow at the intended address. Ticket size and transactions per day need support from comparable shops, and the labor schedule should reflect the early opening and the weekend peak. Because the loans are small, equipment such as espresso machines and the build-out are the main costs; the study should price them against quotes and show how long a lease runs relative to the repayment term. A slow-season case belongs in the cash-flow model. Franchised units must add royalties and supply obligations. The final test is coverage: debt service should be met on a middling sales day count, not only a strong one.