Restaurant Feasibility Study: Buying a Full-Service Restaurant in Broussard, Louisiana, with an SBA 7(a) Loan

The trade area used here is the municipality itself. The research held no radius or drive-time extract for a Broussard address, so the city line stands in for the catchment. The table describes who lives there; it does not translate into a sales forecast on its own.

Three readings matter for a dining room. First, growth is recent and large, and it is a family kind of growth: 28.4% of residents are under 18 against 22.7% statewide, and households average 2.81 persons against 2.49 [1][2]. Family tables tend to mean larger parties and earlier dinners, which suits a Cajun menu better than a bar-led format. Second, incomes are high. A median household income of $116,179 and per capita income of $48,339 put the typical Broussard household well above Louisiana's [1][2], and the labor force participation rate of 77.1% against 58.8% points to earned income, which fits DOTD's 2010 note that residents commute to Lafayette [1][2][3]. Third, Broussard sells more at retail per resident than the state does, $27,416 against $19,351 in 2022 [1][2], which shows spending staying in town.

The same table carries the main caution. Broussard is not a retirement or tourist market: only 9.7% of residents are 65 or over [1], so the weekday senior lunch trade that carries many small-town dining rooms is thin. Sales depend on working households, which makes the weekday dinner and the weekend the restaurant's real business. The city's own economic development office publishes a higher population estimate than the Census does; the case uses the Census figure and treats the gap as a reason to verify local demand rather than assume it.

The register lines above place the city inside a parish that already runs thick with restaurants: the parish carries about a third more restaurants per resident than Louisiana as a whole. That density helps a buyer because the parish eats out, and it hurts because every new room is competing for the same table. Parish incomes sit well below Broussard's own, so the city is a high-income pocket inside a parish whose typical household earns much less.

The access evidence is mixed and dated. The last Louisiana DOTD counts the research found are from 2010: 40,247 vehicles a day on US 90 south of Broussard and 47,492 on Ambassador Caffery Parkway (LA 3073) [3]. DOTD described US 90 that year as the road residents use to commute from Broussard to Lafayette [3]. Current counts with station identifiers were not found and are a lender condition below. Since then DOTD has been rebuilding the US 90 and Ambassador Caffery interchange, a $136.52 million project whose February 21, 2024 release estimated completion by spring 2026 [4]. Access to a restaurant on the parkway was disrupted in the meantime, including an overnight closure of LA 3073 between the US 90 lanes in April 2025 [5]. Whether the finished interchange helps or hurts a given site depends on where its entrance sits relative to the new ramps, which the study treats as a site question and not a corridor-wide gain.

Two demand drivers the research could not size are crawfish season and festival weekends. Both are real in kind for Acadiana restaurants, but no source quantified them for Broussard, so the model carries no seasonal premium and a lender condition asks for monthly sales from the seller.

Picture an independent full-service Cajun and seafood restaurant, owned with its building, somewhere along the Ambassador Caffery and US 90 corridor inside Broussard. The model assumes roughly four and a half thousand square feet, about one and a half acres and about 110 seats. Those round numbers are placeholders and describe no actual restaurant, and the address, parcel, parish and menu concept are left open on purpose. With an existing business the live question is not whether the use could be permitted but whether it keeps its permissions when the owner changes.

Zoning

The City of Broussard publishes its zoning ordinance through its permitting and licensing page [16]. No district was found for any restaurant parcel, and no by-right or conditional status. A zoning verification letter that names the district, confirms the restaurant and bar use, and states rebuild rights after a casualty is a lender condition. A restaurant that serves alcohol may also depend on separation rules from schools and churches that the research did not retrieve.

Utilities and taxes

• Water, sewer, electric and gas: no provider was confirmed for any parcel on the corridor, and impact or connection fees were not found. An operating restaurant already holds its connections; the question matters if the buyer expands the kitchen.
• Sales tax: the rate depends on the parcel. The table lists 9.50% inside Lafayette Parish, made of the 5.00% state rate, 2.00% for the parish school board and 2.50% for the city [17]. Parcels inside the Ambassador Caffery Extension economic development subdistrict pay 10.50%, because it adds 1.00%, and the part of Broussard in St. Martin Parish pays 11.00%, all effective October 1, 2025 [17]. The state rate rose from 4.45% to 5% on January 1, 2025 [18]. Sales tax is collected from guests and is not a restaurant expense, but it is part of the check a guest compares with other rooms.
• Corporate income tax: Louisiana moved to a flat 5.5% rate for periods beginning on or after January 1, 2025 [19]. The model stops at EBITDA, so the rate does not enter the coverage test.
• Property tax: the Lafayette Parish Assessor's 2025 report shows Broussard with no municipal general alimony millage, against 3.6 mills in Youngsville, 4.66 in Carencro and 4.32 in Scott [20]. The parish and school levies that apply to the parcel and the assessment ratio were not found. The model carries a placeholder of 1.00% of the real estate allocation, and the tax bill is a lender condition. For scale, the parish collected $288,314,896.36 in property tax for tax year 2025 [20].

Flood, wind and environment

The flood zone is undetermined and so are the site's wind and flood insurance costs. DOTD notes that the US 90 and Ambassador Caffery corridor carries hurricane evacuation traffic [3], which is a reminder that Acadiana restaurants are underwritten for storm closures. The Phase I environmental screening is smaller for a restaurant than for a fuel site but not optional: grease interceptors, any former on-site fuel tank and the age of the building's systems are all diligence items.

Cost of sales. The model charges 33.0% of food sales and 25.0% of beverage sales. A seafood-heavy menu carries a food cost that moves with the market for shrimp, crab and fish, and those markets can swing. The research held no Louisiana restaurant cost benchmark, so these are placeholders that the seller's purchase invoices replace.

Payroll. The restaurant buys 27,500 hourly hours a year at $14.00 an hour, plus 12.0% for payroll taxes and workers' compensation. Those hours cover cooks, dishwashers, servers, bussers and a bartender across lunch and dinner service. Two salaried managers cost $110,000, charged at a market rate even if the buyer runs the kitchen, so the test cannot lean on work the buyer does for free. Wages and other costs grow 3.0% a year, slightly faster than menu prices.

Card fees and property tax. Card processing is 2.7% of sales, since most dining checks are paid by card. The property tax placeholder of 1.00% applies to the real estate allocation only, because the parcel's actual levy was not found. A sale at the new price may also prompt a reassessment.

Other expenses. Utilities for a commercial kitchen, insurance with flood and wind cover, repairs, linen, smallwares, pest control, waste, licensing, marketing, point-of-sale software and accounting start at $195,000 and grow with wages. In a hurricane region the insurance part of that line is the one most likely to be understated.

Net operating income comes to 11.1% of Year 1 revenue and rises each year, because menu prices grow slightly faster than the fixed part of the cost base and guests grow with the neighborhood. The rising line is the buyer's case; the program reviews it without counting it toward the floor. Price, more than operations, settles this loan.

Under SOP 50 10 8.1 with Technical Policy Updates, in force since October 1, 2026, the business share of a change-of-ownership loan runs at most 10 years, and the real estate share can stretch to 25. The table therefore shows two tranches whose payments per borrowed dollar differ sharply, with the equipment-and-goodwill piece costing most.

The model charges the highest rate the rules allow: Prime, 7.00% in the H.15 release, plus the largest variable spread SBA allows for a loan of this size, which gives 10.00% [24]. The model carries an SBA guaranty share of 75.0% [25], and the FY2027 upfront fee is financed with the project [23]. Lenders can also look at how Louisiana's restaurant loans have performed, shown below from the SBA register.

A one-in-ten charge-off history is the context in which a credit officer reads this deal. At the national level, a law firm relaying a lender trade group's quotation of Appendix 15 reports $8.29 billion of 7(a) acquisition lending in FY2025, with a default rate of 1.93% on acquisition loans against 2.71% on the rest [21]. The route is secondhand and should be checked against SBA's text.

A debt ceiling applies as well: total acquisition debt, including seller debt not on full standby, is capped at the business valuation; any excess must be equity. The restructured $974,898 funds part of the $1,000,000 price together with inventory, working capital, closing costs and the fee, and the buyer's equity covers the rest. The valuation and appraisal must together support at least $974,898 of debt, and any gap is added to the buyer's equity.

Several buyer-side rules apply too. The injection is 10% of project cost at minimum. A standby seller note, other standby debt and minority investors together may fund no more than half of it. As for price terms, the SOP says seller earnouts prohibited; buyer rebates must pay down the 7(a) loan; purchase-agreement working-capital true-ups are not rebates. A seller who stays on as a consultant is held to 24 months, which matters when the recipes and the regulars belong to the seller.

The 7(a) Small path, with its 1.10x test, is not open to this buyer; its basis is historical or projected, plus the two most recent months of business bank statements; projections must reach 1.10x within one year; does not apply to changes of ownership. Our 7(a) and 504 lending practice covers the programs behind these tests.

The rule in Appendix 15 reads: the initial-acquisition floor is 1.25x on historical EBITDA over total post-transaction debt service, on the last fiscal year-end or the average of the last two. Forward-looking numbers get a narrow role: projections are reviewed but cannot meet the floor, except an owner-occupied Special Purpose Property acquisition whose price the appraised value fully supports, where the floor may be met on projections within two years.

As proposed. The made-up seller earned $172,000 in FY2024 and $160,000 in FY2025; the page flags both as invented. The case tests the later, lower year, the more cautious of the two bases the rule allows. The proposed $1,032,390 loan carries $135,407 of yearly debt service and is covered 1.18x. That is a fail, and the two-year average, though better, does not rescue it. In a market where a rival is about to open, the weaker recent year is also the fairer picture.

As restructured. With 14.9% equity ($170,693) the loan drops to $974,898, yearly debt service to $127,866, and FY2025 covers it 1.25x. Equity, loan size and coverage all clear their tests. What the buyer buys with the added cash is eligibility; the restaurant itself does not change.

What the projections add. Forward coverage on the restructured loan is 1.16x in Year 1 and 1.30x in Year 3, above the general standard and, in the first year, under the acquisition floor. Restaurants are outside SBA's special purpose examples [22], so the projection exception is unavailable and the history decides. When history and forecast diverge, neither should be trusted until 2026 interim statements arrive. If they track the forecast, the right answer is a lower price, not more equity.

Feasibility Study Company prepares this kind of test for buyers and their lenders. Request a methodology briefing to see how a study of your own target would be built. Our research note on what SOP 50 10 8.1 changed for feasibility studies explains the higher acquisition floor and why projections lost their weight in these deals.

Coverage in Year 3 ranges from -0.42x to 3.14x across the grid, and the negative corner is a year in which NOI itself turns negative. The drivers are chosen because they are where a single dining room on this corridor is exposed. Guests carry the competitive risk: King's Seafood, the limited-service wave and every other room in town fish in the same pool of households [12][14]. Food cost carries the commodity risk: a seafood menu is priced off shrimp, crab and fish whose market can move faster than a printed menu.

The useful reading is the diagonal. A restaurant that loses a tenth of its guests while its food cost rises by one grid step at the same time, which is what a bad shrimp season and a new competitor look like together, falls well below the level where NOI covers debt service on the restructured loan. A restaurant that holds volume and cost clears the floor with room. The lender's real exposure is a combination, and the lender should test both at once.

1. The history predates the newest competitor. King's Seafood began site work in March 2026 [12], so the seller's FY2024 and FY2025 cannot show its effect.
2. Construction-era sales. The interchange work ran through the seller's recent years and included overnight closures [4][5]. A depressed history flatters the price paid today; a history that was helped by detour traffic would do the opposite.
3. Key-person and recipe risk. A restaurant's value sits in a chef, a manager and a few recipes. The SOP limits a departing seller's consulting to 24 months, so the transfer plan has to be written before closing.
4. Price allocation. If the appraisal puts more of the price into goodwill than the case does, the business portion grows, debt service rises and the required equity rises with it.
5. Collateral. A restaurant building is worth most as a restaurant. If the business fails, recovery depends on another operator wanting the site; see our note on special purpose property risk for the general analysis, even though SBA's list does not name restaurants.
6. Stale traffic evidence. The only counts found are from 2010 [3]. If traffic at the subject's entrance has changed with the new interchange, the guest base differs from the model.
7. Sales tax jurisdiction. A parcel in the subdistrict or in St. Martin Parish charges guests more than one elsewhere in Lafayette Parish [17], which shapes how the menu compares with rivals' on the same road.
8. Storm and flood exposure. Acadiana closures and insurance costs are real, and no insurance quote was available for any parcel.
9. Food cost cycle. A seafood menu can lose margin before the printed menu catches up.
10. Wage pressure. With 77.1% of residents already in the labor force [1], there may be little slack, and wages could rise faster than the 3.0% the model carries.