SBA 7(a) Restaurant Feasibility Study in Indiana

Sit-down restaurants are the leading asset class in Indiana, 1 of 39, and on 7(a) volume the class places 16 among the states. FY2017 through FY2026 produced 540 approvals and $212.6 million. Compared with the national 7(a) record for the same restaurants, Indiana notes run light: the $200,000 median is 0.81x that mark, and $50,000 to $500,000 spans the middle half. Brand affiliation covers 19.3% of loans.

Banks, counties and annual rhythm

The Huntington National Bank is far in front with 122 loans and $29.4 million. Next are 1st Source Bank with $7.3 million over 39 loans, KeyBank National Association with $16.5 million over 28, Centier Bank with 24 loans at $11.1 million, and Stock Yards Bank & Trust Company with $9.0 million over 17. The lenders named here are the holders SBA reports for these loans today. KeyBank carries a large dollar amount per loan. Marion County has 96 loans, Hamilton 51, Allen 37 and Lake 33, with Vanderburgh at 27 and Tippecanoe at 20. Counts were highest in FY2017 and FY2018, at 75 and 79, fell toward 42 in FY2019, and stood at 38 loans in FY2026, a complete fiscal year, with $22.9 million.

Cancellation and loss floors

About 9.0% of approvals in the FY2017 to FY2024 span were cancelled at a minimum, or 9.4% if loans not yet disbursed are scored as cancelled. Charge-offs have claimed 4.7% at least of the 254 Indiana loans funded in the early cohort, FY2017 to FY2021, and 3.1% by the five-year mark. Because borrowers can still default on open loans, treat these as minimums and ask what a lender would see in a worse market.

What an Indiana restaurant study must establish

A study for a full-service restaurant has to turn a concept into covers, checks and a payment the kitchen can afford. In Indiana that means separating demand in the largest trade areas from demand in smaller towns, testing weekday versus weekend patterns, and setting rent or mortgage cost against sales. With a median near $200,000, the budget for build-out, equipment and opening inventory is tight, so the study should itemize it and show contingency. Show that the payment is covered even when the first quarter opens soft. If real estate secures the loan, an appraisal must stand on its own. SBA defines program terms, and none are repeated here.