SBA 504 Liquor Store Feasibility Study in Massachusetts

Massachusetts is third among states for 504 liquor store loans on loans counted, which is high for a niche class, though liquor stores are tenth of 39 inside the state. The 27 loans total $18.8 million. The $517,000 median sits at 0.93x the nationwide 504 liquor store mark, and the loans in the middle run from $349,500 to $965,500. The low end of that band is high for a retail class, which suggests property-heavy purchases rather than inventory-only deals. Many Massachusetts owners also buy the building their store occupies, and the study should say whether that is the case here. That band is notably narrow at the low end: few loans are small. No loan was franchised.

A three-way split

Bay Colony Development Corporation is credited with 8 loans and $3.7 million, New England Certified Development Corporation with 7 and $9.0 million, and Granite State Economic Development Corporation with 7 and $4.2 million. The second has the largest average by a wide margin. The list is a register of holders. Essex County has 6 loans, Suffolk 5, Barnstable and Plymouth 3, Berkshire, Hampden and Worcester 2, and Bristol, Hampshire and Middlesex 1.

Years

FY2017 had 5 loans, FY2018 2, FY2019 3, and FY2020 6 loans and $2.8 million. FY2021 had 3, FY2022 and FY2023 2 each, FY2024 none, FY2025 3 loans and $4.2 million, the largest dollar year, and FY2026 a single loan of $990,000. Because 504 funds property, these loans mostly buy buildings with stores in them.

Unseen rates

There are no published cancellation or charge-off percentages for this cell, since each cohort is small. The blanks are not zeros.

A Massachusetts liquor study

The licence is the heart of the case. A study should show how the licence is held, whether it transfers with the sale or needs local approval, and any limits on the number of licences in the town. It should test sales from the location and nearby competitors, margin by product, and the effect of delivery and online ordering. Where the building is financed, show its value with and without the store, and run coverage with sales declining after a change of ownership. Inventory financing and insurance belong in the budget.