SBA 7(a) Restaurant Feasibility Study in Arkansas

The restaurant is Arkansas's first class

Full-service restaurants rank first among the 39 classes SBA financed in Arkansas under the 7(a) program, which makes this the page where the state's small-business lending is easiest to read. The file shows 152 loans for FY2017 to FY2026 and $51.8 million in gross dollars. Against other states Arkansas is far less prominent: it ranks 38 for 7(a) full-service restaurant loans by number. The loans are small. Arkansas borrowers have a median of $209,750, which is 0.85x what restaurant borrowers elsewhere show, and the middle half stretches from $75,000 to $438,000, which is the range of a modest fit-out, an equipment package or a business acquisition and not a ground-up building. Franchise brands account for 14.5% of loans, leaving the larger share to independents.

Lenders and where the loans cluster

Arvest Bank is the dominant holder, with 37 loans worth $8.6 million. Southern Bancorp Bank follows with 13 and $8.4 million, Simmons Bank with 9 and $6.9 million, Legacy National Bank with 8 and $4.0 million, and Newtek Bank, National Association with 8 and $1.0 million. The names are present holders per SBA, and ranking them passes no judgment on any bank. Benton County alone has 43 loans, Pulaski 22 and Washington 15, with Garland at 10 and Sebastian at 6, so the northwest corner and the capital carry the class. Year by year the count ran from 9 in FY2024 to 25 in FY2025, which shows how unsteady a single state's restaurant lending can be.

Failure and cancellation floors

Here the outcome figures are the page's sharpest feature. Cancellations came to at least 8.9% of FY2017 to FY2024 approvals, while the undisbursed-as-cancelled ceiling is also 8.9%. The 67 Arkansas loans that went out the door by FY2021 carry a charge-off floor of 10.4% as of now, against 6.0% when only the first five years count. Those are minimums that can only grow as open loans age, so a lender reading an Arkansas restaurant request should expect a feasibility study to confront closure risk directly. SBA's coding of full-service restaurants in Arkansas comes with no stated limitation.

Testing an Arkansas restaurant project

A study for an Arkansas restaurant under this program has to prove the sales before it prices the debt. That means covers per day built from the trade area, with Benton County and Pulaski County showing very different densities of competitors, and a menu price that the local wage base can bear. Kitchen equipment and tenant improvements belong beside a loan that usually runs to a few hundred thousand dollars, and any plan above the upper end of the middle half needs a reason. The coverage test should survive a season of weak sales and higher food and labor costs, because the early charge-offs on record show how fast a thin margin fails. The appraisal of a restaurant property depends on whether the building would still earn its rent if this tenant left, so the study should address that alternate use.