SBA 7(a) Restaurant Feasibility Study in New Mexico

Second-ranked class, modest loans

Of New Mexico's 39 classes, full-service restaurants place second in the 7(a) record, with 78 loans from FY2017 to FY2026 totaling $34.8 million. New Mexico is 47th among states by count, a reflection of its size. The median of $177,500 is 0.72x the national reading for the class, and the central half runs from $51,875 to $600,000. Franchise brands account for 9.0% of loans, so independent restaurants carry the file.

Albuquerque and the oil patch

Bernalillo County, which holds Albuquerque, has 27 loans. Eddy has 8, Santa Fe 7, Curry and Sandoval 6 each, Dona Ana 4, and Lea and Taos 3 each. Eddy and Lea are not major population centers, so loans there reflect small-town restaurants. Top of the holder table is Western Commerce Bank, 13 loans and $4.0 million. Then U.S. Bank, National Association with 8 loans ($438,000), and with 5 loans each The Bank of Clovis ($1.0 million) and PNC Bank, National Association, whose $120,000 is a tiny average. SBA reports current holders, nothing more.

Outcomes, with a gap

Cancellation after approval is floored at 8.3% and the ceiling matches. New Mexico has too few early funded restaurant loans for a published charge-off rate, so none appears and no inference should follow from the gap. Annual approvals dropped from 13 loans and $2.9 million in FY2017 to 3 and $1.1 million in FY2021, then recovered to 7 and $2.4 million in FY2026.

What a New Mexico study has to test

New Mexico restaurant work should be specific about the local market: the resident base, tourists in places like Santa Fe and Taos, and the daytime workers around Albuquerque offices. It must test competing restaurants, a menu and pricing strategy for the audience, and the cost of leasing or buying the space against a loan near $177,500. Debt service should be shown with a cautious covers and check forecast, since sales vary by season in tourist towns. Because the file has no published charge-off rate, a lender may weigh the borrower's own experience more heavily, and the study should present that experience plainly. A full-service restaurant is a distinct class from cafes and quick-service counters, which are read from their own pages.