Liquor Store Feasibility Study in Minnesota

Minnesota liquor stores: smaller loans, early losses

Minnesota liquor store loans are small for the class. The median of $325,900 is 0.72x the national liquor store median, and the median is the one metric that distinguishes this cell. Volume is moderate: 167 approvals worth $81.4 million from FY2017 to FY2026 rank Minnesota 13 of 53, liquor stores place 9 of 39 among Minnesota's classes, and a 0.88x location quotient leaves them a little under their national weight.

Where Minnesota's losses fall

The charge-off floor is 6.2% of the 81 Minnesota liquor store loans disbursed over FY2017 to FY2021; measured inside five years of approval the Minnesota rate is the same 6.2%, so every recorded loss came early, in the first years after a purchase or opening. Cancellation was lower, at a floor of 8.1% for Minnesota approvals from FY2017 to FY2024 and a ceiling of 10.7%. The risk in this record sits in the first five years after approval. All rates are floors.

Programs, lenders and the Twin Cities

SBA 7(a) carried 148 loans and SBA 504 carried 19, the latter led by Midwest Business Finance Corporation with 8 and, with 6 loans worth $7.9 million, Twin Cities-Metro Certified Development Company. In 7(a), U.S. Bank, National Association holds 17 loans worth $5.2 million and Falcon National Bank 14 worth $7.6 million, ahead of The Huntington National Bank with 8 and BankVista and Sunrise Banks National Association with 7 each. Franchised stores account for 11.4% of loans. Minnesota's middle half of approvals spans $150,000 to $587,000. Hennepin County has 37 approvals and Ramsey 35, with Dakota at 16 and Anoka at 14. Lending peaked at 29 loans worth $16.7 million in FY2021 and has eased since, to 5 in FY2026.

Because Minnesota's losses landed inside five years, a feasibility study for a liquor store here has to be most rigorous about the first years. When a Minnesota store changes hands, the study must verify the seller's sales by category, gross margin and inventory value, and whether the licence transfers cleanly. For a new store, it has to show the trade area's demand against competing stores and test the build-out, shelving and opening inventory against a loan near $325,900. Debt service coverage should be proven in year one, not only at maturity, and if the buyer also takes the building through 504, the appraiser has to value that property without the licence attached.

The Minnesota counts follow the industry code on each SBA loan record.