Lone Star Smokehouse LLC — SBA 7(a) Financing Package
📈 Why This Loan Will Be Approved
✓ Strong DSCR 3.2x — well above SBA minimum of 1.25x. Ample cash flow to service new debt.
✓ 4-year proven operating history — consistent revenue growth from $380K (2022) to $2.84M (2025).
✓ Identified lease signed — South Congress Avenue location, 2,800 sq ft, 10-year lease with 2 five-year options.
✓ Experienced management — founder has 14 years restaurant operations experience. GM hire secured for Location 2.
✓ Texas LLC with clean title — no existing liens, no judgments, no prior bankruptcies.
🏠 Texas SBA Lending Context
Texas is the #1 SBA 7(a) lending state by volume — over $4.2B in SBA loans issued in Texas in FY2025. Austin MSA is the fastest-growing restaurant market in TX. Preferred SBA lenders in Austin include Frost Bank, Comerica, and Live Oak Bank.
Lone Star Smokehouse LLC — Company Summary & Ownership
| Legal Name | Lone Star Smokehouse LLC |
| DBA | Lone Star Smokehouse |
| Entity Type | Texas Limited Liability Company |
| State of Formation | Texas (filed Feb 14, 2022) |
| EIN | XX-XXXXXXX |
| NAICS Code | 722511 — Full-Service Restaurants |
| Current Location | 4820 Burnet Rd, Austin TX 78756 |
| Second Location (proposed) | 1902 S Congress Ave, Austin TX 78704 |
| Years in Business | 4 years (opened Feb 2022) |
| 2025 Revenue | $2,840,000 |
| Employees | 28 (22 FT, 6 PT) |
| Seating Capacity | 120 indoor + 40 patio (Location 1) |
🍔 Concept & Competitive Position
Lone Star Smokehouse is an Austin-based Texas BBQ restaurant specialising in Central Texas-style brisket, ribs, and sausage. Dine-in, takeout and catering (catering = 22% of revenue). The Burnet Road location has a 4.7★ Google rating (1,847 reviews) and was named "Best BBQ in Austin Under $25" by Austin Monthly (Oct 2025). The South Congress second location targets the tourist-dense and food-forward SoCo neighbourhood.
| Name | Role | Ownership | Guaranty |
|---|---|---|---|
| Marcus J. Hill | Founder / Owner-Operator | 80% | Personal ✓ |
| Diane Hill | Co-Owner / Bookkeeping | 20% | Personal ✓ |
👤 Marcus J. Hill — Founder
14 years restaurant operations experience. Pitmaster-trained under a Central Texas legend (4 years under tutelage). Former General Manager, Two Smoky Guys Restaurant Group (2014–2021), overseeing 3 locations and 65 employees. Texas Food Manager Certificate (ServSafe). No prior bankruptcies, no criminal record, credit score 742.
✅ Location 2 — Signed Lease
Lease signed Dec 12, 2025 with SoCo Properties LP. 10-year initial term + two 5-year options. Base rent: $8,400/month (Year 1-3), escalating 3%/year thereafter. 2,800 sq ft. Personal guaranty signed by Marcus Hill. Landlord TI allowance: $48,000 (towards kitchen buildout). Lease conditional on financing.
⚠ SBA Small Business Eligibility
Lone Star Smokehouse qualifies as a small business under SBA size standards (NAICS 722511: <500 employees). No outstanding SBA loans. No affiliates. Owner is US Citizen. Certifies compliance with 13 CFR Part 121.
SBA 7(a) $750,000 — Second Location Expansion — South Congress Avenue, Austin TX
| Use of Proceeds | Total Cost | SBA Loan | Owner Equity |
|---|---|---|---|
| CONSTRUCTION & LEASEHOLD IMPROVEMENTS | |||
| Kitchen buildout & ventilation | $184,000 | $136,000 | $48,000 |
| Dining room renovation | $68,400 | $68,400 | $0 |
| Bar & service area | $42,200 | $42,200 | $0 |
| Patio & outdoor seating | $28,400 | $28,400 | $0 |
| ADA compliance & permits | $18,600 | $18,600 | $0 |
| EQUIPMENT & FIXTURES | |||
| Commercial smokers (2 × offset, 1 rotisserie) | $124,000 | $124,000 | $0 |
| Kitchen equipment (grills, fryers, coolers) | $87,400 | $87,400 | $0 |
| POS system & technology | $18,200 | $18,200 | $0 |
| Furniture, fixtures & smallwares | $42,800 | $42,800 | $0 |
| WORKING CAPITAL & OPENING COSTS | |||
| Opening inventory & supplies | $22,400 | $22,400 | $0 |
| Pre-opening payroll (6 weeks training) | $38,600 | $38,600 | $0 |
| Marketing & grand opening | $24,000 | $24,000 | $0 |
| Security deposit & utilities setup | $42,000 | $18,000 | $24,000 |
| Contingency reserve (10%) | $53,000 | $81,000 | $72,000 |
| TOTAL PROJECT COST | $894,000 | $750,000 | $144,000 |
| % of Total | 100% | 83.9% | 16.1% |
| Milestone | Target Date | Status |
|---|---|---|
| Lease signed | Dec 12, 2025 | ✓ Complete |
| Loan application submitted | Feb 1, 2026 | ✓ Complete |
| SBA credit approval | Mar 15, 2026 | ◦ Pending |
| Loan closing / funding | Apr 1, 2026 | ◦ Pending |
| Construction begins | Apr 7, 2026 | ◯ Planned |
| Kitchen equipment delivery | May 15, 2026 | ◯ Planned |
| Staff hire & training | Jun 1, 2026 | ◯ Planned |
| Grand Opening | Jul 4, 2026 | ◯ Planned |
| Loan Amount | $750,000 |
| SBA Program | SBA 7(a) Standard |
| Term | 10 years (120 months) |
| Interest Rate | Prime + 2.75% (currently 11.0%) |
| Estimated Monthly Payment | $10,320 |
| Annual Debt Service | $123,840 |
| SBA Guaranty Fee | 2.77% ($20,775) — included in loan |
| Collateral | Equipment lien + personal guaranty |
Owner Equity Injection: $144,000 funded from Location 1 cash reserves ($284,600 on hand as of Dec 31, 2025). No debt financing of equity injection.
Lone Star Smokehouse LLC — Historical P&L 2022–2025 (Tax Basis)
| Line Item | 2022 (9mo) | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| REVENUE | ||||
| Dine-In & Takeout | $296,400 | $1,024,800 | $1,748,200 | $2,214,800 |
| Catering | $83,600 | $248,400 | $508,600 | $625,200 |
| TOTAL REVENUE | $380,000 | $1,273,200 | $2,256,800 | $2,840,000 |
| COST OF GOODS SOLD | ||||
| Food Cost (meat, ingredients) | $106,400 | $368,800 | $639,400 | $795,200 |
| Beverages & Bar | $18,400 | $61,200 | $108,400 | $134,800 |
| Paper / Packaging | $8,200 | $28,400 | $48,200 | $62,400 |
| GROSS PROFIT | $247,000 | $814,800 | $1,460,800 | $1,847,600 |
| Gross Margin % | 65.0% | 64.0% | 64.7% | 65.1% |
| OPERATING EXPENSES | ||||
| Labor (wages + payroll tax) | $112,400 | $424,800 | $698,200 | $852,000 |
| Rent & Occupancy | $37,200 | $78,000 | $84,000 | $84,000 |
| Utilities | $18,400 | $48,200 | $52,400 | $56,200 |
| Marketing & Advertising | $22,400 | $48,400 | $62,400 | $78,400 |
| Other Operating Costs | $28,400 | $68,400 | $84,200 | $98,400 |
| Depreciation | $12,400 | $28,800 | $38,400 | $42,000 |
| EBIT | $16,200 | $118,200 | $441,200 | $636,600 |
| Interest Expense | ($4,200) | ($8,400) | ($6,800) | ($4,200) |
| TX Franchise Tax | — | ($6,200) | ($12,400) | ($22,400) |
| NET INCOME | $12,000 | $103,600 | $422,000 | $610,000 |
| EBITDA Component | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income | $103,600 | $422,000 | $610,000 |
| Add: Interest Expense | $8,400 | $6,800 | $4,200 |
| Add: Taxes | $6,200 | $12,400 | $22,400 |
| Add: Depreciation | $28,800 | $38,400 | $42,000 |
| REPORTED EBITDA | $147,000 | $479,600 | $678,600 |
| Add: Owner Add-Back (health ins) | $8,400 | $8,400 | $8,400 |
| Add: One-time legal costs | $0 | $12,400 | $0 |
| NORMALISED EBITDA | $155,400 | $500,400 | $687,000 |
| EBITDA Margin | 12.2% | 22.2% | 24.2% |
Financial Health Summary: Lone Star Smokehouse has demonstrated exceptional revenue growth and margin improvement over 3 years of operation. The 2025 normalized EBITDA of $687,000 represents 24.2% margin — significantly above the restaurant industry benchmark of 8-12%. This financial performance provides strong confidence in debt service capacity.
Lone Star Smokehouse LLC — Full Year 2025 & January 2026 YTD
| Line Item | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | FY 2025 |
|---|---|---|---|---|---|
| REVENUE | |||||
| Dine-In / Takeout | $482,400 | $584,200 | $612,800 | $535,400 | $2,214,800 |
| Catering | $128,600 | $172,400 | $148,200 | $176,000 | $625,200 |
| TOTAL REVENUE | $611,000 | $756,600 | $761,000 | $711,400 | $2,840,000 |
| COST OF GOODS SOLD | |||||
| Food Cost | $175,200 | $209,600 | $214,400 | $196,000 | $795,200 |
| Beverages | $29,400 | $36,600 | $38,200 | $30,600 | $134,800 |
| Packaging | $14,200 | $16,800 | $17,200 | $14,200 | $62,400 |
| GROSS PROFIT | $392,200 | $493,600 | $491,200 | $470,600 | $1,847,600 |
| Gross Margin | 64.2% | 65.2% | 64.5% | 66.1% | 65.1% |
| OPERATING EXPENSES | |||||
| Labor & Payroll Tax | $198,400 | $224,400 | $226,800 | $202,400 | $852,000 |
| Rent | $21,000 | $21,000 | $21,000 | $21,000 | $84,000 |
| Utilities | $13,200 | $14,800 | $15,400 | $12,800 | $56,200 |
| Marketing | $18,400 | $21,200 | $22,400 | $16,400 | $78,400 |
| Other Operating | $22,400 | $26,400 | $26,200 | $23,400 | $98,400 |
| Depreciation | $10,400 | $10,400 | $10,600 | $10,600 | $42,000 |
| EBIT | $108,400 | $175,400 | $168,800 | $184,000 | $636,600 |
| Interest | ($1,200) | ($1,000) | ($1,000) | ($1,000) | ($4,200) |
| TX Franchise Tax | ($5,600) | ($5,600) | ($5,600) | ($5,600) | ($22,400) |
| NET INCOME | $101,600 | $168,800 | $162,200 | $177,400 | $610,000 |
Revenue quality: Steady throughout the year with July/August peak (outdoor dining + summer events). Holiday December dip is typical for Austin BBQ concepts. Catering revenues provide partial counter-seasonality (corporate events peak Q4).
Note on Tax Returns: Figures above are consistent with the 2025 Form 1065 (Partnership Return) filed by Lone Star Smokehouse LLC. Copies of 2022, 2023, 2024, and 2025 tax returns provided as Exhibit A in the loan application package.
Lone Star Smokehouse LLC — December 31, 2025 (Compiled by BlackpeakCFO)
| Assets | Dec 31, 2025 | Dec 31, 2024 |
|---|---|---|
| CURRENT ASSETS | ||
| Cash & Bank Accounts | $284,600 | $182,400 |
| Accounts Receivable (catering) | $42,400 | $28,200 |
| Food & Beverage Inventory | $28,600 | $24,400 |
| Prepaid Expenses | $12,400 | $8,600 |
| TOTAL CURRENT ASSETS | $368,000 | $243,600 |
| FIXED ASSETS | ||
| Kitchen Equipment (gross) | $228,400 | $228,400 |
| Less: Accumulated Depreciation | ($126,800) | ($84,800) |
| Leasehold Improvements (gross) | $148,000 | $148,000 |
| Less: Accumulated Depreciation | ($62,400) | ($44,800) |
| FF&E — Furniture & Fixtures | $42,400 | $42,400 |
| Less: Accumulated Depreciation | ($28,400) | ($18,400) |
| TOTAL FIXED ASSETS (net) | $201,200 | $270,800 |
| Security Deposits | $73,000 | $73,000 |
| TOTAL ASSETS | $642,200 | $587,400 |
| Liabilities & Equity | Dec 31, 2025 | Dec 31, 2024 |
|---|---|---|
| CURRENT LIABILITIES | ||
| Accounts Payable | $28,400 | $24,200 |
| Accrued Wages & Payroll Tax | $18,200 | $14,400 |
| Sales Tax Payable | $12,800 | $9,600 |
| Equipment Loan (current portion) | $16,800 | $16,800 |
| TOTAL CURRENT LIABILITIES | $76,200 | $65,000 |
| LONG-TERM LIABILITIES | ||
| Equipment Loan (long-term portion) | $41,400 | $58,200 |
| TOTAL LONG-TERM LIABILITIES | $41,400 | $58,200 |
| TOTAL LIABILITIES | $117,600 | $123,200 |
| MEMBERS' EQUITY | ||
| Marcus Hill (80%) | $419,680 | $185,440 |
| Diane Hill (20%) | $104,920 | $278,760 |
| TOTAL EQUITY | $524,600 | $464,200 |
| TOTAL LIABILITIES + EQUITY | $642,200 | $587,400 |
Strong Balance Sheet: Pre-loan debt/equity of 0.22x is very conservative. Current ratio of 4.83x demonstrates excellent short-term liquidity. Post-loan, debt/equity rises to approximately 1.65x — still within SBA and lender guidelines for restaurant sector.
Lone Star Smokehouse LLC — Combined Entity (Locations 1 & 2) Post-Loan
| Line Item | 2026 (Base) | 2027 | 2028 |
|---|---|---|---|
| Location 1 — Burnet Rd (Established) | |||
| Location 1 Revenue | $2,980,000 | $3,130,000 | $3,286,000 |
| Location 1 Net Income | $640,000 | $672,000 | $705,000 |
| Location 2 — South Congress (New, opens Jul 4) | |||
| Location 2 Revenue (6 months) | $384,000 | $1,100,000 | $1,320,000 |
| Location 2 EBITDA (6 months / ramp) | $28,800 | $198,000 | $264,000 |
| Location 2 Net Income | ($18,400) | $128,000 | $198,000 |
| COMBINED ENTITY | |||
| Combined Revenue | $3,364,000 | $4,230,000 | $4,606,000 |
| Combined Net Income | $621,600 | $800,000 | $903,000 |
| Add: Depreciation & Amortization | $96,400 | $118,400 | $118,400 |
| Add: Interest (back-add for DSCR) | $82,200 | $75,200 | $67,800 |
| NET OPERATING INCOME (for DSCR) | $800,200 | $993,600 | $1,089,200 |
| DEBT SERVICE | |||
| New SBA Loan ($750K, 10yr, 11%) | $123,840 | $123,840 | $123,840 |
| Existing Equipment Loan | $9,600 | $0 | $0 |
| Location 2 Lease (new) | $50,400 | $100,800 | $103,824 |
| TOTAL ANNUAL DEBT SERVICE | $183,840 | $224,640 | $227,664 |
| DEBT SERVICE COVERAGE RATIO (DSCR) | 3.2x ✓ | 4.8x ✓ | 5.6x ✓ |
| SBA Minimum DSCR: 1.25x | Exceeds 2.6x | Exceeds 3.8x | Exceeds 4.5x |
| Scenario | 2026 Revenue | DSCR | Pass? |
|---|---|---|---|
| Base Case | $3,364,000 | 3.2x | ✓ Yes |
| Conservative (−10%) | $3,028,000 | 2.4x | ✓ Yes |
| Stress (−20%) | $2,691,000 | 1.8x | ✓ Yes |
| Severe Stress (−35%) | $2,187,000 | 1.3x | ✓ Yes |
| Break-Even Revenue | $1,842,000 | 1.0x | ⚠ Min |
✓ DSCR Commentary
Even in a severe 35% revenue decline scenario, DSCR remains at 1.3x — above the SBA 1.25x minimum. This buffer is provided by the strong profitability of Location 1 (which generates 91% of current EBITDA). Location 2 projected losses in 2026 are already absorbed in the projections above.
⚠ Key Assumptions
▪ Location 2 opens Jul 4, 2026 (Independence Day — strategic date for foot traffic)
▪ Location 2 ramps to 65% of Loc 1 revenue by Month 6
▪ No additional debt financing required for operations
▪ Austin restaurant market remains stable (no macro shock assumed)
▪ Owner-operator management: Marcus Hill splits time 60/40 Loc1/Loc2 in Year 1
Location 1 Note: Location 1 revenue projection assumes 5% YoY growth (in line with trailing 12-month trend). Conservative estimate vs historical 49% CAGR. SoCo location expected to drive additional catering demand to Location 1 via brand awareness.
Lone Star Smokehouse LLC — Security for $750,000 SBA 7(a) Loan
| Asset | Estimated FMV | Orderly Liq. | Lender Position |
|---|---|---|---|
| BUSINESS ASSETS — LOCATION 1 (Existing) | |||
| Commercial Smokers & Grills (3) | $82,000 | $58,000 | 1st lien |
| Commercial Kitchen Equipment | $64,400 | $44,000 | 1st lien |
| Refrigeration & Walk-in Coolers | $28,400 | $18,000 | 1st lien |
| POS System & Technology | $8,200 | $4,000 | 1st lien |
| BUSINESS ASSETS — LOCATION 2 (New, funded by loan) | |||
| Commercial Smokers (3, new) | $124,000 | $86,800 | 1st lien |
| Kitchen Equipment (new) | $87,400 | $61,200 | 1st lien |
| FF&E — Furniture & Fixtures | $42,800 | $21,400 | 1st lien |
| POS & Technology (new) | $18,200 | $9,100 | 1st lien |
| TOTAL EQUIPMENT COLLATERAL | $455,400 | $302,500 | 1st lien |
| Cash Pledge (deposit account) | $75,000 | $75,000 | 1st lien |
| Personal Guaranty (Marcus Hill) | See PFS | $304,400 | Personal |
| TOTAL COLLATERAL | $682,400+ | $681,900 | ✓ Adequate |
⚠ SBA Collateral Policy Note
SBA requires lenders to take all available collateral up to the loan amount. For loans under $500K, SBA does not decline solely due to lack of collateral if cash flow supports repayment. The DSCR of 3.2x is the primary credit factor; collateral provides secondary support.
| Personal Assets | Value |
|---|---|
| Primary Residence (Austin TX, owned free & clear) | $428,000 |
| Personal Savings & Checking Accounts | $84,200 |
| Retirement Accounts (IRA, 401k) | $124,400 |
| Personal Vehicle (2022 F-150, net of loan) | $18,400 |
| Business Interest — Lone Star Smokehouse (80%) | $419,680 |
| TOTAL PERSONAL ASSETS | $1,074,680 |
| Mortgage on Primary Residence | $0 (free & clear) |
| Auto Loan Balance | ($8,200) |
| Credit Card Balances | ($4,400) |
| TOTAL PERSONAL LIABILITIES | ($12,600) |
| PERSONAL NET WORTH | $1,062,080 |
👤 Credit Profile — Marcus Hill
▪ Personal Credit Score: 742 (Good — Experian)
▪ No prior bankruptcies or defaults
▪ No tax liens or judgments
▪ Primary residence free & clear (no mortgage) — available as additional collateral if required
▪ Personal net worth $1,062,080 — 141.6% of loan amount
Personal Guaranty: Both Marcus Hill (80% member) and Diane Hill (20% member) will execute unlimited personal guarantees in accordance with SBA Standard Operating Procedures. Guaranty agreement to be executed at closing.
Lone Star Smokehouse LLC — Eligibility, Compliance & Texas Requirements
| Certification / Requirement | Status |
|---|---|
| Texas LLC — Secretary of State Good Standing | ✓ Current |
| Texas Franchise Tax — Annual Report Filed | ✓ 2022, 2023, 2024 |
| Texas Sales Tax Permit (Texas Comptroller) | ✓ Active |
| Austin City Certificate of Occupancy | ✓ Current (Loc 1) |
| Texas Food Establishment Permit (DSHS) | ✓ Current |
| TABC Retail Dealer On-Premise (beer/wine) | ✓ Current |
| Workers Compensation Insurance (TX) | ✓ Active |
| General Liability Insurance ($2M policy) | ✓ Active |
| Federal EIN — IRS | ✓ Assigned |
| SBA — No Prior SBA Loans or Defaults | ✓ Confirmed |
| SBA Eligibility — US Citizen, No Felonies | ✓ Certified |
| SBA Size Standard (NAICS 722511, <500 emp) | ✓ Qualifies |
| FEMA Flood Zone Check — Burnet Rd location | ✓ Zone X (low risk) |
📈 BlackpeakCFO Role in This Application
This financing package was prepared by BlackpeakCFO, fractional controller services for Lone Star Smokehouse. BlackpeakCFO compiled, reviewed, and presented all financial statements. CPA-reviewed 2023 and 2024 financials and 2025 compiled financials are included as Exhibit A. For questions contact BlackpeakCFO at info@blackpeakcfo.com.
📂 Supporting Documents (Exhibit Package)
Exhibit A: 3 years tax returns • Exhibit B: 2025 Compiled Financial Statements • Exhibit C: Signed Lease Agreement • Exhibit D: Construction Quotes (3 contractors) • Exhibit E: Equipment Quotes • Exhibit F: Personal Financial Statements • Exhibit G: Business Bank Statements (12 months) • Exhibit H: Texas LLC documents
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