SBA 7(a) Grocery Store Feasibility Study in Pennsylvania

Pennsylvania grocery lending, small and weighted to Philadelphia

Pennsylvania's grocery store record under SBA 7(a) covers 143 loans approved from FY2017 to FY2026, totalling $82.9 million. The state ranks 10 among states for the class, and grocery stores place 11 of 39 among Pennsylvania asset classes. Set against the national 7(a) grocery median, the $210,100 median loan stands at 0.68x, with half of loans between $75,000 and $700,000. Franchising reaches only 2.1% of loans. The page therefore rests on where the loans sit and who holds them.

Philadelphia and its lenders

Philadelphia County alone has 49 loans, nearly four times Allegheny County's 13, with Montgomery at 11, Delaware County at 10 and Bucks at 8. The current holders SBA reports begin with TD Bank, National Association, 15 loans for $958,000, a very small average. Woori America Bank holds 13 loans for $9.2 million, Wilmington Savings Fund Society FSB 9 for $6.2 million, and Manufacturers and Traders Trust Company, holding 11 loans for $1.8 million, with KeyBank National Association in the middle at 10 loans and $7.7 million.

The cancellation floor is 9.5% of FY2017 to FY2024 approvals, rising to 11.2% when undisbursed loans are counted as cancelled too. Charge-offs are the sharper signal. Pennsylvania's 50 grocery loans that funded from FY2017 approvals through FY2021 show a running write-off floor of at least 10.0%, although the first five years claimed only 2.0%. Most of the losses therefore came after the first five years. Open loans can still add to both figures.

Testing a Pennsylvania grocery request

A feasibility study for a Pennsylvania grocery store should test the walking and driving catchment in the specific neighbourhood, because 49 of the loans sit in Philadelphia County. It must compare local competitors, supply costs and the mix between fresh and packaged goods, then show debt service coverage with a margin that survives a slow year. Equipment and inventory should be separated from real estate in the budget. If the borrower leases, the study should confirm the remaining term supports the loan term. The appraisal should speak to market rent and, where the building is bought, to its value as a store.