Liquor Store Feasibility Study in Connecticut

Connecticut: package stores near the top of the SBA book

Package stores are a pillar of SBA lending in Connecticut. Liquor stores are second, at 2 of 39, among Connecticut's SBA classes, and a 2.92x location quotient says the class claims a far larger share of Connecticut's SBA loans than it does across the country. Connecticut ranks 9 of 53 among states, with 247 approvals for $89.6 million from FY2017 to FY2026, and each loan tends to be small: the median is $200,000, just 0.44x what liquor stores borrow nationally at the median, and the interquartile band for Connecticut stores is $50,000 to $422,500. Our screen does not flag the median, cancellation or charge-off rate against both comparators beyond sampling noise, so the defining feature here is how much of Connecticut's SBA lending flows to package stores.

Santander Bank, National Association is the dominant lender, with 71 loans for $24.4 million. Manufacturers and Traders Trust Company follows with 31 for $4.9 million, TD Bank, National Association with 29 for $6.0 million, Liberty Bank with 13 for $5.0 million and KeyBank National Association with 10 for $3.8 million. SBA 7(a) carries 235 loans and SBA 504 just 12, with Community Investment Corporation writing 7 of those for $4.0 million. No franchise appears, at 0.00%. By region, South Central CT leads with 44 loans and Capitol with 39, followed by Fairfield with 23 and Hartford and New Haven with 22 each.

Cancellation and charge-off in Connecticut package stores

Cancellation is high: at least 15.5% of FY2017 to FY2024 approvals fell through after approval, and 17.5% at the ceiling. Losses arrive slowly: of the 103 loans that funded in FY2017 to FY2021, 7.8% are charged off so far, but only 2.9% within five years, so many failures came after the fifth year. Both are floors. Volume has stayed high, with 31 loans in FY2021, 25 loans for $20.3 million in FY2023 and 36 loans in FY2025.

What a Connecticut package store study must test

With this many stores financed, a study for a Connecticut package store has to start with competition: the stores already licensed within the trade area, their size and pricing, and the supermarkets and big-box sellers nearby. A store purchase needs a check of the seller's sales history against tax and distributor records, inventory at cost, and the terms of the lease or real estate. Coverage of the debt has to hold on a Connecticut store's actual gross margin, since retail liquor margins leave little room, and it has to carry the payment past year five, when the losses in this cell tend to show. Where a building is financed, the appraisal must value it as retail space apart from the business and its license.