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

A franchise-led program above national loan size

Tennessee limited-service restaurants took 282 SBA 7(a) loans worth $140.2 million between FY2017 and FY2026. Brands account for 60.3% of loans, while a $350,000 median loan sits at 1.18x what quick-service borrowers receive elsewhere, with the central half from $150,000 to $587,250. In Tennessee this class tops all 39, though as a state it sits at 22 for the program. Taken together, those ranks describe a market where quick-service restaurants matter locally more than the state matters nationally.

Cancellation ceiling versus floor

The cancellation floor is 12.6% of FY2017 to FY2024 approvals, while the ceiling is 15.5%, a wider gap than most cells show, because many Tennessee approvals had not yet funded. Of the 101 loans funded from FY2017 to FY2021, 6.9% stand charged off to date, with 3.0% falling in the first five years. The charge-off cohort is modest, so one or two loans move it, and neither percentage is a settled outcome. A borrower should weigh the high ceiling most, because it measures how often a paper approval stays on paper.

Lenders and geography

The Huntington National Bank has 50 loans for $15.5 million, ahead of Byline Bank with 12 for $9.3 million, Citizens Bank with 12 for $4.8 million, Pinnacle Bank with 11 for $9.0 million and Metro City Bank with 11 for $5.9 million. SBA lists the holder today. Davidson County has 60 loans, Shelby 43, Williamson 35, Knox 33 and Montgomery 21.

Recent growth

Loans rose from 16 in FY2019 to 40 in FY2026, with $25.2 million in the latest year, so the most recent approvals are the largest group and the least seasoned.

Testing a Tennessee quick-service loan

A Tennessee study should test the site's traffic and trade area, drive-through capacity, labour costs and the franchise terms. With cancellations rising when disbursement is included, it should show that lease, permits and equity are in place, and since the median sits above the national level, the build-out should be itemised. Coverage needs to hold if sales run below the brand's average, and the appraiser should weigh how many years remain on the brand contract.