SBA 7(a) Grocery Store Feasibility Study in New York

The cancellation floor stands out

New York grocery stores financed through SBA 7(a) have a distinctive cancellation record, and that separates the cell from both New York's overall lending and grocery lending nationally. Cancellations alone reach 20.0% for the FY2017 to FY2024 approvals, topping out at 20.2%. Put plainly, roughly one approved grocery loan in five fell away after approval, so planning for deal risk matters here. The cell holds 524 loans for $441.7 million gross. The state is 2 in the nation for this program and class, with grocery at 6 of 39 in New York. A $350,000 median is 1.13x the national grocery figure, half of all loans are $100,000 to $1.2 million, and franchises are just 1.3%.

Holders and boroughs

NewBank holds 87 loans worth $139.6 million, TD Bank, National Association 71 worth $8.6 million, Bank of Hope 37 worth $55.2 million, Manufacturers and Traders Trust Company 34 worth $6.8 million and Metro City Bank 28 worth $60.9 million. Dollar totals and counts diverge sharply: TD Bank has many small loans, and Metro City Bank few large ones. The listing is SBA's holder field, and it carries no view of any institution's policies. Kings County has 116 loans, Queens 77, New York 66 and the Bronx 61, so the city's boroughs dominate; Nassau has 24, Suffolk 22, Westchester 21, Richmond 19, Erie 18 and Sullivan 16. Yearly counts fell from 88 in FY2017 to 28 in FY2020 and stood at 43 in FY2026.

Loss floors

Charge-offs are heavy for a class this size. Of 241 loans funded in FY2017 to FY2021, 13.3% are charged off to date, and 6.2% were gone by the fifth year. These stand as floors, since open loans can still fail. Together with the cancellation floor, they describe a segment where a lender sees real attrition.

What a New York grocery study has to test

Given that one approval in five has fallen away, a study should anticipate what causes delay: lease terms, build-out permits, the seller's records in an acquisition and licensing for any specialty departments. The market test is dense and local. Count households within walking distance in the borough concerned, the competing supermarkets, bodegas and specialty grocers, and the ethnic or dietary preferences the store intends to serve, because a New York grocer typically succeeds by serving a specific neighborhood well. Rent and labor sit high, so cost lines against a median of $350,000 should cover equipment, refrigeration, inventory and improvements, and debt service coverage must be shown with thin margins and spoilage. The appraisal rests mostly on the business and the lease.