SBA 7(a) Grocery Store Feasibility Study in Washington

Larger grocery loans in the Evergreen State

Washington's grocery lending under SBA 7(a) is distinctive for how large the loans run. Washington's $430,750 median is 1.39x the national level, and our tests treat that median as distinct from both the all-class Washington record and the national grocery record. The middle half spans $142,250 to $1.1 million. From FY2017 to FY2026 the state recorded 144 loans totalling $115.4 million, ranking 9 among states, while grocery stores sit at 13 of 39 within Washington. Franchise ties are nearly absent at 1.4%, so most of these are independent or family stores.

Holders on the books, and the counties

Columbia Bank has 15 loans in SBA's holder listing, but only $1.6 million in total, so its loans are small. Readycap Lending, LLC has 14 loans worth $21.9 million, U.S. Bank, National Association 11 worth $8.7 million, Banner Bank 10 worth $1.7 million, and Open Bank 9 worth $11.1 million. The contrast in dollars per loan across those names is wide, and it hints at two kinds of grocery borrowing: small neighbourhood stores and larger acquisitions. King County accounts for 30 loans and Snohomish for 19, Pierce for 16, Yakima for 10, and Grays Harbor and Spokane for 9 each. Annual approvals rose to 19 loans and $18.7 million in FY2021 and to 24 loans and $17.4 million in FY2025, against only 8 loans in FY2017.

Floors for cancellations and losses

Cancellation claimed 8.4% or more of approvals made through FY2024, and 9.3% when loans not yet disbursed are added. Of the 55 earliest funded Washington loans, 3.6% had been charged off by now, and the early-years reading is the same 3.6%. Washington grocers therefore show losses early when they show them at all. Both figures are minimums, because loans still open can change them.

A feasibility study for a Washington grocery should be explicit about format. A full-service independent, an ethnic market and a specialty store draw on different customers, and the study must define which one the loan funds and size the trade area accordingly. Sales per square foot, labour, perishables loss and the cost of refrigeration make up most of the operating risk, so each should be modelled and the debt service coverage tested with weaker sales. Larger loans mean more real estate or acquisition value at stake, so the study should reconcile purchase price with the income approach used by an appraiser. In the Seattle area, rent and wages differ sharply from Yakima or Spokane, and a statewide average will not do. SBA decides eligibility; the study supplies the evidence a lender weighs, and it cannot promise an approval.