SBA 7(a) Restaurant Feasibility Study in Hawaii

Hawaii restaurants: tiny loans, island lenders

Hawaii's full-service restaurants rank first of 39 classes under SBA 7(a), yet the loans are the smallest on this page group: a median of $50,000, which is 0.20x the national figure for the class, and a middle half from $40,000 to $250,000. Across FY2017 to FY2026 there are 109 loans totaling $32.3 million. Hawaii is only 42nd among states by count, which reflects its size, not a lack of restaurant lending. No loan carries a franchise: that share is 0.00%, so this is an all-independent file.

One bank and one island

Central Pacific Bank holds 59 loans worth $6.3 million, well over half the count and more than five times the next holder, First Hawaiian Bank, at 10 loans and $738,000. Northeast Bank has 6 loans for $1.2 million, and Hawaii National Bank has 5 for $1.4 million. Geography is just as concentrated: Honolulu County has 86 of the loans, Kauai 10, Hawaii County 7 and Maui 6. A sponsor on a neighbor island has far fewer local precedents than one on Oahu. Approvals fell from 22 loans and $6.0 million in FY2017 to 4 and $1.3 million in FY2021 and 3 and $1.5 million in FY2026.

Floors

The charge-off floor is notable, at 6.1% to date for the 49 early loans that funded and 4.1% within five years of approval. Cancellation after approval has a floor of 11.7% and a ceiling of 13.8%. Minimums, all of them: loans still open may deteriorate, and the shrunken recent pipeline gives little to read a trend from.

What a Hawaii restaurant study tests

A restaurant study in Hawaii has to start with a customer base that mixes residents and visitors, and the split drives everything else. It should test seasonal swings in covers, the competition within the same district, and the cost of ingredients, labor and rent in an island economy against a ticket near $50,000. Because the median loan is small, many of these borrowers are probably buying or refreshing an existing restaurant, but the file does not say, so a study should state its own assumptions about purchase, lease and renovation. The lender will look at the charge-off floor above, so the debt payment needs to be covered under a cautious sales case. SBA codes full-service dining as one class, which means bars and cafes are read from other classes.