Liquor Store Feasibility Study in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area

High cancellations and large tickets

Liquor stores in the Philadelphia area rank 7 of 426 metro and micro areas, with 179 loans from FY2017 to FY2026 worth $173.4 million, and locally the class is seventh among 39. The location quotient is 1.39x. Two metrics set this cell apart from the class elsewhere. The median loan is $700,000, 1.56x the nationwide class midpoint, with $172,500 and $1.4 million as the quartiles. And cancellation after approval reaches at least 20.6% of FY2017 to FY2024 approvals, and as floors go it is a high one, a sign that many approved loans never reach disbursement.

Programs and holders

Philadelphia's 179 loans include 174 on 7(a) and 5 on 504, so liquor store lending here is about business acquisition and inventory more than property. Fulton Bank, National Association is listed with 24 loans worth $44.8 million, TD Bank, National Association with 22 worth $5.3 million, Wilmington Savings Fund Society FSB with 17 worth $23.8 million, Provident Bank with 10 worth $7.1 million and Peapack Private Bank and Trust with 9 worth $10.9 million. SBA's holder data says who carries a loan; it says nothing about credit stance. The franchise share is withheld and must not be read as zero.

Four states in one area

The area crosses four states. Camden County, NJ leads with 49 loans, then Burlington, NJ with 24, New Castle, DE with 20, Delaware County, PA and Philadelphia with 17 each, Bucks and Montgomery with 15 each and Gloucester, NJ with 11. Liquor licensing differs by state, a fact that matters more here than the totals: the study must identify the state and licence type behind the proposed store. Yearly approvals fell from 25 loans in FY2018 and FY2021 to 12 in FY2025 and FY2026.

Withheld values and the study

Held back, because too few loans support them, are the cancellation ceiling and a charge-off rate; held back is not zero. Philadelphia placement follows each project county's name on the 2023 metropolitan map. Because cancellations run high, a lender should see a study that tests whether licence transfer, lease and inventory financing are in place before closing. The study should also test the sales base of the trade area, the margin on the licence, the purchase price relative to cash flow, coverage of debt service by that cash flow, and an appraisal that separates inventory and goodwill from real estate.