Liquor Store Feasibility Study in Massachusetts

Massachusetts liquor stores borrow less per deal

Loan size is the distinctive feature of Massachusetts liquor store lending. The median SBA loan is $245,000, 0.54x the national liquor store median, and the gap from the Massachusetts all-class median also exceeds our screen's margin. Volume is high: 235 approvals worth $101.2 million across FY2017 to FY2026 rank Massachusetts 10 of 53, liquor stores rank 7 of 39 inside the state, and a 1.18x location quotient shows liquor stores weighing more in Massachusetts than nationally.

Store purchases and local banks

Franchising barely exists here at 0.43% of loans, and the middle half runs from $63,750 to $585,000, the range of store purchases, inventory and modest fit-outs. SBA 7(a) carries 208 approvals and SBA 504 carries 27. Eastern Bank holds 44 loans for $4.8 million and Rockland Trust Company 38 for $25.1 million, the latter clearly funding larger deals; TD Bank, National Association holds 19, Leader Bank, National Association 14 for $10.5 million and Santander Bank, National Association 13. Among development companies, Bay Colony Development Corporation holds 8, and New England Certified Development Corporation and Granite State Economic Development Corporation hold 7 each. Middlesex County leads with 50 approvals, then Essex at 32, Plymouth at 28, Suffolk at 26 and Worcester at 24.

Low losses, notable cancellations

Of 128 Massachusetts liquor stores funded in FY2017 to FY2021, at least 1.6% are charged off, and 0.78% within five years. Cancellations run higher, with 14.5% of the state's FY2017 to FY2024 liquor approvals cancelled at minimum and 16.1% once undrawn loans are added. Volume dipped to 8 approvals in FY2023 and recovered to 34 worth $13.4 million in FY2025.

For a Massachusetts liquor store purchase, the study has to show what the buyer is paying for. Demand rests on the store's location, its customer counts and the competing package stores and grocers that sell alcohol nearby. Cost covers the purchase price, inventory and any fit-out, and the transfer steps that must be completed before closing, which is where approvals fall away. Coverage hinges on margin by product line and on whether the seller's reported sales are real, so the study should rebuild sales from supplier and register records. The appraisal values a going concern, and the study should explain the price in terms of sustainable cash flow.

The liquor class needs no coding caveat. Bear in mind only that SBA approvals are a subset of all store financing in Massachusetts, and that each rate here is a floor on loans still open.