Liquor Store Feasibility Study in Mississippi

DeSoto County and a 7(a)-only market

Mississippi liquor store lending is concentrated in one county and uses one programme. From FY2017 through FY2026 SBA guaranteed 38 loans totaling $21.2 million, all of them under 7(a) and none under 504. DeSoto County alone has 10 loans, and Madison has 3, with Chickasaw, Harrison, Hinds, Itawamba, Lowndes and Pontotoc at 2 each. The median of $388,000 is 0.86x the national class median, the location quotient is 1.06x, and the class holds 9 of 39 among Mississippi classes while the state sits at 27 of 53 on volume. Nothing in the cell is distinctive.

Lender and ticket structure

The central half of loans spans $150,000 to $865,300. BayFirst National Bank alone appears in the lender listing, with 6 loans worth $1.1 million, so the remainder is spread over many banks. No loan carries a franchise brand, at 0.00%. Because liquor retail in the state is tightly licensed, a buyer is often acquiring an operating store, its inventory and its licence together, which fits the mid-sized ticket. DeSoto County sits beside Memphis, so part of the demand may come from across the state line, though the data does not say so.

Cancellations, losses and swings

The cancellation floor for approvals from FY2017 to FY2024 is 6.5%, and the ceiling is the same. The charge-off rate is not shown because the funded cohort falls under the 30-loan line; we offer no number and make no claim of zero. Annual approvals ran from 1 loan in each of FY2019, FY2021 and FY2022 up to 9 loans and $4.6 million in FY2023.

What a Mississippi liquor study must test

A study should confirm the licensing path first, including whether the local jurisdiction allows package sales and the cost and timing of a licence transfer. Next, examine the trade area, how close rival stores sit and the effect of cross-border shopping in the north of the state. Inventory, fixtures and the lease should be priced against a ticket near $388,000, and the coverage ratio belongs in a case where margins tighten. An appraiser will value the going concern on sales history and the licence, so a startup needs a conservative forecast and an acquisition needs reconciled books. Rural stores may depend on a few customers, so concentration should be tested.