SBA 7(a) Grocery Store Feasibility Study in Oregon

Oregon grocers: bigger tickets, more cancellations

Oregon grocery borrowers under 7(a) take loans well above the national norm. Fifty-eight approvals total $56.5 million. The midpoint of $425,000 runs 1.37x the national 7(a) midpoint for this class, and the middle half stretches from $126,675 to $1.3 million. Oregon places 17 against other states in grocery 7(a) volume, and grocery store ranks 12 of 39 inside Oregon's own mix. Franchises hold 5.2% of loans, so independents and small chains dominate.

Who holds the loans and where

Readycap Lending, LLC holds 11 loans carrying $23.6 million, an average ticket far above any other line. Columbia Bank has 9 loans, $1.6 million. KeyBank National Association and U.S. Bank each hold 5, at $4.3 million and $1.9 million respectively. Those are current holders, not a description of lender policy. Multnomah County has 10 loans, Tillamook 5, and Hood River, Lane, Linn and Yamhill 4 each, a spread showing grocery lending reaching coastal and valley towns as well as Portland.

The cancellation floor

The cancellation figure is the striking outcome: at least 14.3% of FY2017 to FY2024 Oregon grocery approvals never funded, and the ceiling is 14.3% too. A floor is not a forecast. A cancelled loan often means a deal that did not close, whether over a lease, a permit, a seller's price or a financing gap. Too few Oregon grocery loans funded in the cohort for a charge-off figure to be published, so none appears, and the gap says nothing about safety either way.

What a study must establish

Start from the questions that cancel deals. Define the trade area and the rival stores, including natural-food and discount formats, and show the sales needed to support rent or ownership cost. With loans reaching $1.3 million at the upper quartile, many are real-estate or acquisition loans, so state the purchase price basis, the inventory to buy and the working capital to stock opening shelves. Test coverage against a slow ramp and against a competitor's response. For small Oregon towns, treat the store as the only convenient supplier and still test whether the population sustains it. Value the building and equipment separately from the going concern, since collateral matters if sales disappoint.