SBA 7(a) Restaurant Feasibility Study in Mississippi

The class that leads Mississippi

Full-service restaurants are the single largest asset class in Mississippi's SBA record, ranked 1 of 39, even though the state ranks just 39 among states by 7(a) loan count for the class. That contrast is the heart of this cell: nationally Mississippi is a small market, while inside the state restaurants account for more lending than anything else. From FY2017 to FY2026 SBA approved 150 loans to sit-down operators through 7(a), totalling $57.5 million. The median is $184,150, only 0.75x of what 7(a) borrowers in this class receive nationally, with the middle half between $74,275 and $400,000. Mississippi borrowers therefore take smaller loans than their counterparts elsewhere.

Community banks lead the table

Franchise affiliation is a modest 18.7%, so independent restaurants are the rule. The lender table is led by Community Bank of Mississippi with 28 loans worth $6.3 million, then Trustmark Bank with 24 worth $3.2 million, BankFirst Financial Services with 20 loans at $10.2 million, and below it Huntington (14 loans, $6.6 million) and Peoples Bank (12 loans, $2.3 million). BankFirst stands out for the average size of its notes. These are holdings as SBA lists them today. Madison County has 19 of the loans, Harrison 16, and DeSoto, Hinds and Rankin 11 each, so activity is spread across several regions rather than one metro.

Cancellations and losses stay low

Outcome figures here are modest: the cancellation floor is 5.6% and the ceiling 6.5%. Loss experience is light: for the 77-loan disbursed vintage spanning FY2017 to FY2021, 1.3% is charged off today and 1.3% was within five years. Open loans may still go bad, so these are floors rather than final results. Annual approvals bounce around, from 9 in FY2019 to 21 in FY2018, with 20 in FY2024 worth $10.5 million and 13 in FY2025.

Questions a Mississippi restaurant study must answer

Because restaurants lead the state's lending, a new application is likely to meet a lender who has seen many; the study has to distinguish the project quickly. It should test demand at the specific location, such as traffic counts, the draw of nearby employers and tourism seasonality on the coast, and weigh the competitors on the same corridor. Build-out or acquisition cost needs a line-by-line budget, with equipment separated from real estate. Show the payment covered at a conservative sales level, and a sponsor requesting more than the $400,000 upper end of the middle half should explain why the project warrants the extra size. The appraisal must support the value of the building or leasehold, and the operator's experience, which a lender will weigh, belongs in the study as a documented fact.