SBA 7(a) Restaurant Feasibility Study in Maine

Lean tickets in the leading Maine class

In Maine, full-service dining outranks every other asset class under SBA 7(a), at 1 of 39, but the loans are small. Maine's median, $134,200, is only 0.55x of the national 7(a) median, the measure our test singled out; the typical ticket sits somewhere from $50,000 up to $250,000. The program approved 190 loans between FY2017 and FY2026, worth $55.8 million, and the state stands 35 among states. Franchise brands account for just 3.2%, so owner-operated dining rooms make up nearly all of the book.

Low cancellations and early losses

Cancellations of approvals through FY2024 are 6.9% at a minimum, with no difference once undisbursed loans are counted. For the 93 funded Maine loans, the charge-off floor is 2.2% so far and 1.1% inside five years of approval; loans still open could raise either, though neither is large. Approvals fell from 31 in FY2018 to 11 in FY2020 and FY2021, and the latest year shows only 8 loans so far, though those 8 total $7.2 million, a sign of larger tickets.

Savings banks and the coast

Bangor Savings Bank leads at 57 loans and $8.7 million, then TD Bank, National Association at 27 loans and $8.3 million, Maine Community Bank 20 worth $7.4 million; Kennebunk Savings Bank holds 13 and the last name listed, KeyBank National Association, 12. SBA reports current holders only, and the table implies nothing about how any of them lends. Cumberland County, with Portland, has 73 loans and York County 53, together far ahead of Penobscot with 15 and Knox with 10, while Aroostook has 7. The coastal south dominates; a restaurateur in the north or the interior has little local precedent here.

A Maine restaurant, tested

Seasonality is the first test. Summer visitors can carry a coastal restaurant while winter covers fall away, so the study should model sales month by month and show debt service coverage in the slowest quarter. It should examine the labour supply, including seasonal housing for staff, supplier costs for seafood and produce, parking, septic capacity and the lease term. With a median near $134,200 the loan funds a modest fit-out, not a new building, so working capital to carry the shoulder seasons is important. The appraiser will weigh business earnings across a full twelve months, and a sponsor with only a summer record should say so.