Liquor Store Feasibility Study in the Los Angeles-Long Beach-Anaheim, CA Metro Area

A heavy tilt toward liquor, mostly 7(a)

Liquor stores matter more to SBA lending in Los Angeles-Long Beach-Anaheim than almost anywhere else. The location quotient is 1.89x, so liquor stores weigh far more in local approvals than they do nationwide, and the area ranks 2 of 426 metro and micro areas for liquor store loans. Within the area's own ranking of classes it sits at 4 of 39. Between FY2017 to FY2026 SBA approved 642 loans, worth $400.5 million in gross dollars. The franchise share is 0.00%: this is an independent-owner trade, and none of the loans carry a franchise flag.

Loan sizes and program mix

The median loan is $406,000, a ticket at 0.90x the class's national median, so a Los Angeles store borrows a little less than the typical store elsewhere. The central half of liquor store tickets begins at $210,000 and tops out at $798,750. SBA 7(a) accounts for 631 loans and SBA 504 for only 11. Los Angeles County provides 539 loans and Orange County 103. Approvals were steady at 63 in FY2017 and 65 in FY2019, dipped to 42 in FY2022 and reached 77 in FY2026, when they totalled $62.7 million.

Lenders, as SBA reports them

The register of current holders is led by banks rather than development companies. PCB Bank holds 108 loans worth $79.3 million and Bank of Hope 107 loans worth $47.8 million, followed by American Continental Bank with 70, Open Bank with 66 and Hanmi Bank with 58. Each line is SBA's record of paper a bank holds or once held, and none of it reveals how that bank would judge a fresh application.

Cancellations and the withheld rates

Cancellation after approval reached at least 7.7% of Los Angeles liquor loans approved between FY2017 and FY2024; treat that as a floor. For this market Two measures are withheld by Loan Analytics for this market, namely the upper bound on cancellations and the rate of loans charged off, since too few loans stand behind them to print. No number appears for either, and an absent figure is not a zero.

Testing a Los Angeles liquor store

Liquor retail is licence-dependent, so a study has to confirm that the licence transfers or can be obtained for the site and that the local rules on location and hours do not undercut the plan. Demand should be tested store by store, and revenue should be shown net of inventory cost at a margin the sellers' own books support. Debt service coverage needs a case where sales fall after the ownership change. Each loan is placed by where its project county falls in July 2023's area definitions, and a county that will not place drops out.