SBA 7(a) Grocery Store Feasibility Study in Michigan

A rank of 3 for grocery under 7(a)

Michigan is third among states for 7(a) grocery loans, though grocery holds only 12th place among the state's 39 asset classes. SBA has approved 176 loans since FY2017, worth $148.1 million. The median of $300,000 is 0.97x the nationwide 7(a) median for grocery, which puts the typical Michigan ticket on the national line, and loans in the middle range from $100,000 to $1.2 million. Franchising is rare at 2.8% of loans. What distinguishes the cell is how concentrated it is in lenders and places.

One lender dominates the file

The Huntington National Bank is listed on 64 loans, Fifth Third Bank on 24 and First Internet Bank of Indiana on 8. SBA names the present holder, so these figures record holdings and do not judge any bank. The size of the first entry means a grocer's financing in Michigan has run largely through one institution. Wayne County has 47 loans, Macomb 22, Kent 18 and Oakland 17, so metropolitan Detroit and Grand Rapids account for most of the file; Berrien and Kalamazoo have 5 each.

A cooling trend

Volume peaked at 28 loans in FY2023, with $25.2 million, then fell to 19, 14 and 9 loans in the following years. FY2026 shows 9 loans worth $5.7 million. Anyone reading Michigan as a growing grocery market should note that the SBA record turned down.

Floors

Cancellation reached at least 13.1% of approvals dated FY2017 to FY2024, and 14.4% counting undisbursed loans. Among the 77 loans funded in FY2017 through FY2021, 3.9% have been charged off to date, but 0.00% within five years of approval, which means the charge-offs came later than that window. Both are floors, because open loans could still change.

What a Michigan grocery study has to test

Trade area comes first: households within reach, incomes, the chains already present and food-access gaps that an independent store might serve. The sales per square foot needed to cover rent, payroll and debt must be shown against realistic competition from supermarkets and discount formats. Equipment such as cold cases and refrigeration is a large cost, and winter energy bills and snow-related disruptions should be modelled. Set a loan near $300,000 beside the cost of inventory, fixtures and any building purchase. The repayment test should survive a slow first year, and an appraiser will require sales evidence.