Liquor Store Feasibility Study in Kentucky

Kentucky liquor store loans are tiny against the national class

What marks the Kentucky liquor store file is the size of the loans. A median of $187,500 is only 0.42x what liquor retailers borrow nationally at the midpoint, with typical requests of $75,000 to $360,000, so these are inventory and fixture loans far more than real estate loans. The 48 loans approved from FY2017 to FY2026, $17.0 million in all, which ranks Kentucky 24 of 53 among states; liquor stores hold 11 of 39 in Kentucky's own ranking, and a location quotient of 0.93x says the state's share of lending is close to the nation's.

Everything is 7(a), and one bank dominates

Every one of the 48 loans came through 7(a), with 0 under 504, as one expects when little real estate is financed. No loan is franchised, at 0.00%. Community Trust Bank, Inc. holds 19 loans worth $3.0 million, which is about four in ten of the file and shows how much a single regional lender shapes this market. Fayette County has 8 loans, Jefferson 4, and Boyd, Marion and Warren 3 each, so Lexington outweighs Louisville here.

Cancellation and a blank charge-off cell

Between FY2017 and FY2024, at least 14.0% of approvals fell away, and the ceiling is the same figure, so roughly one in seven approved loans did not fund. Kentucky's charge-off percentage is withheld since the funded cohort is below the publication minimum of 30 loans; do not treat the blank as a zero. Annual counts bounce about, from 10 loans in FY2021 to 3 in FY2022, then 8 loans and $3.0 million in FY2024, and FY2026 stands at 3 loans and $453,400.

What the study should test for a Kentucky package store

Demand for a package store is shaped by licence rules, local ordinances and who else holds a licence nearby, so the study should start with whether a licence is available and transferable. It then tests sales per household in the trade area, inventory turnover and margin. Because loans are small, build-out and opening stock must be budgeted tightly. Coverage should be shown at a conservative sales level. Where the sponsor buys an existing store, the valuation should separate the licence, inventory and goodwill.