SBA 7(a) Quick Service Restaurant Feasibility Study

Quick service in 7(a): volume and losses

Quick service restaurants took 19,828 SBA 7(a) loans and $8.83 billion from FY2017 to FY2026, with 48.6% carrying a franchise. The median loan is $297,000, and the middle half spans $101,975 to $515,000.

The cost of volume

Losses are the price of that reach. The charge-off floor is 7.6% on the 8,250 restaurant loans that funded in FY2017 to FY2021, and 4.4% inside five years. Cancellation is 12.3% at minimum and 13.4% at most. A lender reading the floor will want franchise units and independents looked at separately, and the figures here do not split them that way.

The Huntington National Bank dominates with 2,145 loans and $578.5 million. Live Oak Banking Company stands out with 483 loans but $510.8 million, almost as many dollars on far fewer loans. Manufacturers and Traders Trust Company has 559 loans for $82.2 million, TD Bank, National Association 501 for $87.6 million and Stearns Bank National Association 434 for $137.1 million. California leads with 2,569 loans, Texas has 1,720, Florida 1,218, New York 1,051 and Ohio 917. Volume fell to 1,352 loans and $587.5 million in FY2020, peaked at 2,584 loans and $1.23 billion in FY2025, and eased to 1,859 loans and $971.4 million in FY2026. Earlier years ran at 2,151 loans and $791.5 million in FY2017 and 1,816 loans for $988.8 million in FY2021, while FY2024 recorded 2,262 loans and $1.02 billion. Behind Ohio's 917 loans come Georgia at 859, Michigan at 752, Pennsylvania at 736, Illinois at 696 and Washington at 661. With 48.6% of the loans carrying a franchise system, nearly half of the loans listed here belong to a brand.

What a quick service study has to test

SBA attaches no limitation line to this class. For a 7(a) quick service loan, the study has to test demand from traffic, daypart and the competing brands on the same corridor; the cost of the remodel, equipment or acquisition against the unit's own sales history; debt service coverage net of royalties and advertising contributions, on sales the unit or its comparables have proven; and, for owned real estate, an appraisal of the building's dark value.