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

Third in the state, near the bottom nationally

In Mississippi, limited-service restaurants hold third place of 39 asset classes in SBA 7(a) records, yet the state is only 40th among states by number of loans. The record holds 89 loans worth $43.9 million. The median loan of $295,500 is 0.99x the national figure for the class, which makes Mississippi level with the country, and most loans lie between $149,900 and $500,000. Franchise-affiliated borrowers account for 58.4% of the loans, a majority.

Of the 36 loans funded early in the series, SBA's files list no charge-off, and the rate reads 0.00% whichever way it is measured. Cancellation after approval had a floor of 10.0% for loans approved through FY2024, with the same ceiling. A floor records only what has occurred, so the clean figure describes the past and does not bar future defaults.

Lenders and counties

Community Bank of Mississippi holds 13 loans worth $4.5 million. BankFirst Financial Services holds 9 worth $4.4 million, Peoples Bank 8 worth $3.5 million, Trustmark Bank 7 worth $768,300, and Pinnacle Bank 5 worth $4.4 million, a much higher average than Trustmark's. These are SBA's holder records and claim nothing regarding what a bank requires. The counties lead in this order: Harrison and Madison with 11 each, then Rankin with 8, Jackson with 6, and Hinds, Lafayette and Lamar with 4 apiece.

Approvals rose from 4 in FY2017 to 13 in FY2019 and have held between 6 and 11 a year since, with FY2023 at $7.5 million and FY2026 at $6.8 million on 8 loans.

Tests for a Mississippi quick-service project

A fast-food or counter-service unit lives on traffic and speed. The study should count vehicles and people at the site, locate the competing units and the anchors that bring customers, and estimate sales from transactions and average check. If the project is a franchise, as most in this cell are, the agreement's royalty, advertising fund and required remodel schedule must be in the cost model, along with the franchisor's sales expectations for similar sites. With a typical loan of $295,500, the budget is mostly equipment, signage and improvements, perhaps a drive-through; the study should state what a lender could realistically recover from them. Coverage of the payment should survive a slow opening, and the study should say who operates the unit day to day.