SBA 7(a) Grocery Store Feasibility Study in Iowa

Iowa grocers: one credit union and smaller tickets

Community 1st CU is the only name in the Iowa grocery holder table, with 5 of the 31 loans and $898,500, as SBA lists it, which makes the cell a mix of a few credit-union loans and many other holders that are not shown separately. The 31 loans total $10.7 million. The midpoint of $150,000 is 0.48x the national 7(a) grocery midpoint, and the middle half goes from $76,800 to $321,700. Franchised loans are 9.7%.

Ranks and places

Iowa is rank 22 among states by loan count, and grocery store holds place 9 of 39 at home, a high standing that reflects the role of small-town food stores. Johnson County leads with 5 loans, Polk has 4, Appanoose and Taylor 3 each, and Black Hawk and Jasper 2. Two fiscal years, FY2020 and FY2026, show no loans at $0, while FY2023 had 8 loans and FY2024 had 7 with $3.2 million.

The empty rates

Iowa grocery cancellations and charge-offs are both unpublished, since the two cohorts fell below SBA's minimum; a blank is not a zero. No coding limit applies to the class, and the FY2024 lessor note is irrelevant here. Rates elsewhere on the page, were there any, would be floors.

What an Iowa grocery study has to test

In a small Iowa town a grocery may be the last food store within a long drive, and the study should say so with numbers: population in the trade area, distance to the next supermarket, and what portion of local food spending the store can keep against a regional discounter. In Iowa City, Des Moines and other larger markets, the question is differentiation: what the store offers that chains do not. With a midpoint near $150,000, loans often finance equipment, inventory or a change of owner, so separate the items. The seller's sales records, the lease and the condition of coolers and freezers should be documented. Test sales per square foot and the gross margin the plan needs. Coverage must hold through a slow first year and a year when the nearest chain cuts prices. If real estate is financed, the appraisal should value it for another retail user.