SBA 7(a) Grocery Store Feasibility Study in Georgia

Twice the national ticket, and the cancellations to match

Grocery stores financed under SBA 7(a) in Georgia are large loans: the median of $640,700 is 2.07x what grocery borrowers get nationally, and that ratio, more than any outcome rate, separates it from the state and national records. Half the loans fall between $307,500 and $1.3 million. The state logged 100 approvals totalling $108.5 million, is 12th among states on count, and the class is 15 of 39 in Georgia. Franchise ties account for 7.0% of loans.

Cancellation is high. Loans approved through FY2024 show a floor of 16.9%, and the ceiling is the same, so the cancelled loans were not merely undisbursed. Georgia's early grocery cohort has 37 loans, and charge-offs there are 2.7% at the least, both to date and within five years. The small cohort means one loan changes the figure, and the measure leaves out failures still to come.

Who holds the loans

Metro City Bank holds 15 loans worth $24.9 million, the biggest book. Loyal Trust Bank has 9 loans at $10.7 million, trailed by HomeTrust Bank with 8 at $5.2 million. That reads as a handful of banks active in the segment, and SBA's file says nothing about their practices. Fulton County has 18 loans, DeKalb 17, Gwinnett 14, Forsyth 6, Hall and Richmond 5 each, and Cobb 4.

Approvals dipped to 2 in FY2019 and rose to 16 in FY2021, with $27.2 million, then reached 17 in FY2025 with $21.6 million. FY2026 shows 6 loans worth $11.7 million.

Tests for a Georgia grocery project

A grocery's economics are thin margins on high volume, so the study must prove volume. It should map households and spending within the store's draw area, name the competing supermarkets, discount stores and ethnic grocers, and estimate sales per square foot with a realistic ramp. If the project buys or converts an existing store, the study should say how much of the inventory, equipment and refrigeration is being bought and what it is worth. Perishable shrink, labour and utilities need their own lines. With loans commonly near $640,700 and often far larger, show coverage of the payment under a lower-sales case, and give the appraiser a basis for valuing the property and the going concern separately. The high cancellation rate is a reason to confirm the lease or purchase contract before the loan is relied on.