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ICYMI: COLEMAN: Small Business Lender News of the Day

October 31, 2025

Michigan Business Network

Main Street Monday — Restaurant Sales Trends: Family Dining +1.9%, Quick Service -1.1%, Fast Casual –1.6%

by Bob Coleman

Founder & Publisher

I spent some time this week digging into the October 2025 Restaurant Industry Report from the Citizens Restaurant, Franchise & Multi-Unit team. Their data always gives a solid pulse on where the industry really stands — and right now, the numbers are challenging. Traffic is soft, costs are rising, and more than half of the brands they track are still posting negative same-store sales.

Let’s look at the numbers.

Quick Service: Down 1.1%.

Chicken: -3.0%. KFC fell 5.0%, marking six straight quarters of decline. Popeyes down 0.9%, its second consecutive negative quarter.
Pizza: Flat at -0.2%. Domino’s up 3.4%, Pizza Hut down 5.0%.
Burgers: Down 3.3%. McDonald’s rose 2.5%, while Jack in the Box (-7.1%) and Good Times (-9.0%) were the worst performers.
Coffee/Snack: Up 2.6%, the best-performing QSR category. Dutch Bros. up 6.1%, Tim Horton up 3.6%.
Mexican: Up 0.7%. Taco Bell posted its 20th consecutive positive quarter at +4.0%.

Fast Casual: Down 1.6%. Cava up 2.1% for its 13th straight gain. Potbelly up 3.2%, Shake Shack up 1.8%. On the downside: Fuzzy’s Taco Shop down 11.8% (eight straight negative quarters), Sweetgreen down 7.6%, Chipotle down 4.0%.

Family Dining: Up 1.9%. Cracker Barrel led at +5.4%, Keke’s Breakfast Café +4.0%.

Casual Dining: Up 0.6%. Chili’s surged 23.2%, Olive Garden up 6.9%, Kona Grill down 14.6% — its seventh straight quarterly decline.

Fine Dining: Down 1.8%. The biggest drag came from STK Steakhouse, which fell 6.0% in same-store sales. STK is part of The ONE Group Hospitality (NASDAQ: STKS), which operates high-end “vibe dining” brands including STK Steakhouse and Benihana. Both concepts have been hit by softer traffic on the fine dining side, where rising costs are squeezing margins.

The Citizens team sums it up well — this is still a value-driven market. Operators that execute on efficiency and deliver on price are staying alive.

View full report here.

The Role of Life Insurance Under SOP 50 10 8 for SBA 504 Loans

by Ryan Goodson

CLU, Managing Director

Executive Summary

With the implementation of SOP 50 10 8, effective June 1, 2025, the Small Business Administration (SBA) has refined life insurance requirements critical to the SBA 504 loan program. This paper clarifies when life insurance is required, how coverage must be calculated in relation to collateral, and outlines recommended practices for maintaining compliance and streamlining loan closings.

When Life Insurance Is Required

Certified Development Companies (CDCs) are responsible for assessing whether the viability of a business depends on one or more principals. Life insurance is mandatory in the following cases:

• Sole proprietorships

• Single-member LLCs

• Businesses where repayment depends on the active participation of one key owner

If the SBA loan is not fully collateralized, life insurance is required to mitigate risk. In cases where a principal is uninsurable, the CDC must obtain written confirmation from a licensed insurer verifying uninsurability.

Policy and Collateral Assignment Requirements

Policies must include a collateral assignment naming the CDC and SBA as assignees, acknowledged by the insurer’s home office.

• Existing policies may be pledged if coverage amounts, duration, and assignment terms meet SBA standards.

• Whole life and credit life insurance should not be required by the CDC under current guidance.

This ensures the SBA’s security interest is properly documented and enforceable in the event of a claim.

Coverage Calculation and Collateral Discounting

The required life insurance amount must equal the difference between the net debenture amount and the discounted collateral value.

Collateral Discount Percentages

• Improved real estate: 85% of fair market value (per SBA appraisal)

• New machinery and equipment: 75% of purchase price minus outstanding liens

• Used machinery and equipment: 50% of net book value, or 80% if an Orderly Liquidation Appraisal has been performed, minus liens

• Furniture and fixtures are excluded from collateral discounting for insurance calculation purposes.

Example

Loan amount: $2,500,000

Collateral: $2,000,000 improved real estate and $400,000 new equipment

Discounted collateral value:

(2,000,000 × 0.85) + (400,000 × 0.75) = 1,700,000 + 300,000 = 2,000,000

Read full LifeEase white paper here.

Learn about LifeEase here.

Mastering SBA 7(a) Biz Aq Loans: Structure Deals for Perfect Compliance — Webinar 11/4

In FY 2025, 23.6% of SBA 7(a) loan dollars—over $9 billion—were used for business acquisitions, confirming that change-of-ownership financing remains one of the most active and scrutinized segments of the SBA program.

With Baby Boomers still owning approximately 40% of all U.S. small businesses, the volume of transition transactions continues to rise. And, the new SOP 50 10 8.1 rules demand sharper attention to loan structure, valuation documentation, and guaranty protection.

Led by Lance Sexton, former SBA Deputy Director of the Little Rock Servicing Center and current EVP of Phoenix Lender Services, this training provides a practical, compliance-focused guide to underwriting and closing SBA business acquisition loans. Lance will explain how to structure deals involving asset and stock purchases, apply equity injection and collateral rules, and evaluate goodwill and business valuation standards to ensure every transaction aligns with SBA’s requirements.