SBA 7(a) Restaurant Feasibility Study in Massachusetts

The full-service restaurant under 7(a) in Massachusetts

Massachusetts places table-service dining first among its 39 classes, and the state itself is twelfth for the volume of such loans. SBA's file for FY2017 to FY2026 holds 874 approvals, worth $246.1 million. Franchising is almost absent here, at 1.7% of loans, so the typical file is an owner-operated dining room, not a licensed brand.

A small ticket

The median loan of $105,000 is 0.43x the 7(a) median for full-service dining across the country, and the central loans are priced from $50,000 to $300,000. Massachusetts restaurants, in other words, borrow modest sums under 7(a). A study that proposes a far larger loan should explain why this site differs from the pattern.

Lenders, counties and timing

Eastern Bank has 189 loans in the listing, Santander Bank, National Association 128, Rockland Trust Company 60, TD Bank, National Association 50 and Cambridge Savings Bank 39. These are holders as SBA reports them and nothing in them judges any bank's approach. Middlesex County leads with 200 loans, then Suffolk with 159, Essex 111 and Norfolk 82; Barnstable and Plymouth each have 59. The count fell to 30 loans in FY2021, the low point of the series, and recovered to 112 loans and $29.4 million in FY2025.

What the floors show

Massachusetts full-service approvals from FY2017 to FY2024 lost 11.4% or more to cancellation, and 11.9% if undisbursed loans are treated as cancelled. Of 410 loans that funded across FY2017 to FY2021, 4.1% stand written off now and 2.4% were lost inside five years of approval. Later loans have had less time, so these floors can still climb. They are statements about floors, not a forecast.

What a Massachusetts study has to test

A good study opens with the seat count and the check average the neighbourhood can support, together with competing dining rooms, parking, and seasonal swings. Build-out cost and the lease should be tested against a loan near $105,000, and any gap financed some other way identified. Debt service coverage must hold after labour and food costs rise, and a first-year ramp slower than the owner expects. The appraiser will be valuing an operating restaurant, so the study should present sales and margins the appraiser can trace.