SBA 7(a) Quick Service Restaurant Feasibility Study in Colorado

Colorado quick service in broad strokes

Colorado's limited-service restaurants are a half-franchised segment of SBA 7(a) lending: franchise brands hold 50.9% of the 432 loans in the FY2017 to FY2026 files, which total $209.6 million gross. No metric in the cell lies far from the state record or the class nationally, so what follows is context, not a claim of difference. Colorado stands at 16 for the program and class across the states, and these restaurants are 3 of 39 within Colorado. A $353,800 median is 1.19x the 7(a) norm for the class, while a typical loan lands between $150,000 and $580,650, a little above national practice on size.

Lenders and counties

The Huntington National Bank is the largest name here, with 54 loans and $11.7 million. SouthState Bank, National Association follows with 25 loans and $13.3 million, U.S. Bank, National Association with 20 and $4.1 million, Wells Fargo Bank National Association with 18 and $6.0 million, and Live Oak Banking Company with 17 and $12.2 million. The figures come from SBA's holder field and make no claim about any bank's criteria. Denver County has 75 loans, Arapahoe 56, El Paso 54, Larimer 37, Boulder 35, Jefferson 29, Douglas 28, Adams 23, Weld 20 and Broomfield 9. Approvals ranged from 31 in FY2019 to 61 in FY2025, with 34 recorded for FY2026.

Repayment record so far

Cancellation takes at least 13.1% of approvals in the FY2017 to FY2024 group, and as much as 14.5% when undisbursed loans count as cancelled. In the group of 178 loans funded across FY2017 to FY2021, 7.9% show as charged off today, against 2.8% by the fifth year. Treat both as minimums. The gap between 7.9% and 2.8% is a reminder that many problems surface after the fifth year.

What a Colorado quick-service study has to test

Begin with brand and unit economics: sales at comparable units, royalty and advertising charges, and the equipment and remodel schedule a franchisor will impose. The site study comes next, and in Colorado it should say which kind of market the site is in. Count competing quick-service brands within a short drive, traffic at the hours that matter, and the daytime customer base. Against a median of $353,800, list build-out, equipment, signage and opening working capital separately. Show debt service coverage with first-year sales under plan and wage costs rising. Because the going concern is what an appraiser values, put the lease and the remaining franchise term in the file.