Liquor Store Feasibility Study in Wisconsin

A modest presence in Wisconsin lending

Wisconsin liquor retail shows up in SBA files at a lighter weight than the national picture would suggest. Between FY2017 and FY2026 the files show 83 liquor store approvals in Wisconsin totaling $45.3 million. That ranks the state 18 of 53 in this line of business. Inside Wisconsin the class ranks 16 of 39 among asset types, and the 0.61x location quotient says liquor stores account for less of Wisconsin's approvals than they do across the country. At the median loan of $340,000 is 0.76x the national median for the class, so Wisconsin borrowers typically ask for less than their peers elsewhere. No outcome measure here stands apart from Wisconsin's wider record or the national liquor class, so the story is one of scale and mix, not unusual loss behavior.

Loan sizes, programs and lenders

Half of the approvals fall between $100,000 and $838,250, a range that covers a small inventory and fixture loan at the bottom and a real estate purchase at the top. SBA 7(a) carried 75 of the loans and SBA 504 carried 8, which tells a lender that most Wisconsin liquor deals are working capital, acquisition or equipment financings with real estate a minority use. Franchising is nearly absent at 2.4% of loans, so these are overwhelmingly independent operators whose credit rests on one owner and one location. Byline Bank tops the 7(a) lender list at 17 loans worth $19.3 million, followed by Nicolet National Bank with 6, then The Huntington National Bank and Community State Bank with 5 each. Milwaukee County accounts for 29 loans, with Brown County at 7 and Dane and Walworth counties at 5 each. Annual volume has stayed in a narrow band, from 6 loans in FY2023 and FY2026 to 15 in FY2021, with dollars peaking at $9.4 million in FY2024.

Among FY2017 to FY2024 approvals, at least 13.0% were cancelled before funding, and the figure reaches 15.9% when loans that have yet to disburse are written off as cancelled. Both are floors on a young record. Across the 41 loans that funded over FY2017 to FY2021, a charge-off floor of 4.9% applies today, while the tally for losses early in a loan's life, within five years of approval, is 0.00%. That gap is typical of retail credit: losses tend to arrive later than a quick look at early performance would suggest, and open loans can still default.

What a feasibility study here has to test

A study for a Wisconsin liquor store should begin with demand at the trade-area level, because the state's lower location quotient suggests lenders see this as one category among many rather than a favored one. The sales forecast needs to rest on the licensed alternatives within a realistic drive, local licensing rules, and the margin the store keeps after product cost. Cost testing should compare the build-out or acquisition price against a loan that usually lands near $340,000. The coverage ratio should appear in a base case and in a slower first year, since a cancellation floor of 13.0% shows how many approved projects never reach closing. The appraisal then has to support the price on income, so the study must give the appraiser sales and margin evidence that stands on its own.