SBA 7(a) Restaurant Feasibility Study in Georgia

Georgia's table-service loans are big

The distinctive metric here is size. Georgia's median full-service restaurant loan under SBA 7(a) is $439,500, which is 1.79x the median for the class across all states. Between FY2017 and FY2026 the program approved 1,046 loans worth $713.6 million in gross dollars, with a central half from $250,000 to $858,275. Georgia is tenth among states by loan count, and restaurants hold first place among its 39 asset classes.

Banks and counties

The Huntington National Bank has 78 loans worth $29.3 million. Metro City Bank has 58 worth $52.3 million, a much larger amount per loan, and Renasant Bank has 44 worth $31.7 million. Newtek Bank, National Association has 37 worth $12.9 million, PromiseOne Bank 36 worth $20.0 million. SBA reports these as loans each bank holds or held, which describes a book and not a standard. Franchisees account for 20.4% of approvals. Fulton County has 233 loans, Gwinnett 142, Cobb 97 and DeKalb 89, so Atlanta's counties dominate. Annual approvals dipped to 69 in FY2020 and recovered to 130 in FY2024.

What became of the loans

Georgia's cancellation floor is 12.0% for FY2017 to FY2024 approvals, or 12.2% if undisbursed loans count as cancelled. For the 455 loans that funded by FY2021, charge-offs stand at 6.4% to date and 3.7% by the five-year point. Open loans may still add to both, so a lender should treat each figure as a minimum, and a borrower should expect the final tallies for these approval years to come in higher rather than lower.

Questions a Georgia restaurant study must answer

SBA 7(a) serves general business purposes, so the study should state whether the money pays for a build-out, kitchen equipment, a going-concern purchase or working capital. A median this far above the national figure invites a hard look at cost: a restaurant financed that heavily needs sales to match. The study should weigh seats and turns against rent, the supply of kitchen and floor labour, and competing concepts on the same corridors in metro Atlanta. Show the payment covered on cautious covers per day, with a slower opening year beside it. If the price rests on goodwill, the study should show where that goodwill comes from, because the appraiser will compare earnings with the price paid.