SBA 7(a) Grocery Store Feasibility Study in Illinois

Where the grocery cell stands apart: losses

Illinois grocers drew 154 loans from SBA 7(a), $133.9 million of gross approvals, FY2017 to FY2026, which puts the state 6th for this pairing, while grocery is only 12 of 39 inside Illinois itself. What distinguishes the cell is the loss record. Among the 61 grocery loans that funded from FY2017 into FY2021, at least 14.8% have been written off so far, and 4.9% went within five years of approval. Open loans may still add to those floors. The charge-off measure cleared our margin against Illinois lending overall and against grocery nationally, so a borrower's study should expect to be questioned on it first.

The median of $406,150 is 1.31x what grocers nationally borrow, and half of all loans fall between $99,625 and $1.2 million. Franchising is a footnote at 5.8%, so these are mostly independents rather than chain units. The Huntington National Bank holds 36 loans but only $6.8 million, a book of small tickets; Byline Bank holds 31 loans totalling $53.6 million, a far larger average. U.S. Bank, National Association holds 8 and $3.6 million. The page carries SBA's holder records, which say nothing about how any bank lends. Cook County accounts for 83 loans, Lake 13, DuPage 11 and Will 8.

Loans that never closed

Of FY2017 to FY2024 approvals, at least 12.6% were cancelled, and up to 14.2% if undisbursed loans are counted too. A cancelled loan is no loss, yet a rate this high suggests plenty of grocery plans die at the lease, site or acquisition stage. Annual approvals moved gently, from 14 loans and $11.3 million in FY2017 to a peak of 21 loans in FY2023 and then 10 loans and $6.6 million in FY2026.

What an Illinois grocery study must prove

Supermarket margins are thin and a new store faces entrenched chains, so the first test is the trade area: households, competing banners, and the store's realistic share. The model should then build sales per square foot, shrink, perishables waste and labor, and show coverage of debt service with a slow ramp and a weaker-sales case, given the loss floor above. Equipment and inventory should be separated from the real estate, and the request set against a median above the national one. The appraiser will value sustainable earnings, so the forecast must be defensible.