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

Franchise-heavy, small, and exposed to early losses

Montana's limited-service restaurants under SBA 7(a) rank second of 39 within the state, though Montana is 43rd among states by loan count. SBA recorded 73 loans worth $30.4 million. Franchise-affiliated borrowers account for 54.8% of loans, a majority. The median of $266,400 is 0.90x the nationwide typical, with the middle band from $117,000 to $453,800. The charge-off floor stands out: 10.0% to date among the 30 loans in the early cohort, against 0.00% within five years.

The gap is informative. Losses in this cohort came after the five-year mark, so loans that looked sound at five years failed later. The cohort has exactly 30 loans, the minimum at which we print a rate, so each loan weighs heavily. Montana's cancellation floor on loans approved by FY2024 is 11.1%, with an equal ceiling.

Lenders and counties

Glacier Bank holds 17 loans worth $5.8 million. Three Rivers Bank of Montana holds 8 worth $1.6 million, The Yellowstone Bank 5 worth $1.4 million, and Montana Community Development Corp. 5 worth $615,400. SBA files list holders, not their standards. Yellowstone County has 18 loans, Gallatin 13, Flathead 12, Missoula 8, Lewis and Clark 5, and Custer and Ravalli 3 each.

Approvals stayed between 3 and 10 a year until FY2025, when 13 loans carried $11.4 million, the biggest year. FY2026 shows 6 loans worth $1.9 million.

What a Montana quick-service study must test

In a thinly populated state the trade area can be large and the customers few, so the study should count local residents, regular traffic and seasonal visitors separately, and show monthly sales across the full year. Compare the site against competing units and the national chains nearby, and say whether the project is a franchise. The study should identify cost differences that come with distance, such as freight on supplies and equipment service, and the difficulty of hiring staff in a small town. Since losses in the early cohort emerged after five years, test the project over a longer horizon than the first two years, with debt payments covered if sales decline once the novelty fades. The lender will also want to know what the equipment and improvements would recover. State the ownership or lease position plainly, and show the lender what the kitchen equipment and improvements would bring if the unit closed, since the early losses in this cell were not small.