SBA 7(a) Liquor Store Feasibility Study in Connecticut

Connecticut package stores: small loans, second in the state

The median loan is the distinctive metric here. Connecticut liquor stores borrowing through 7(a) show a median of $163,000, only 0.37x what such stores borrow at the median across the country. The file for FY2017 to FY2026 holds 235 loans worth $83.9 million, the central half spans $50,000 to $417,000, and the state ranks ninth by count. Package stores hold second place on Connecticut's list of 39 classes, which makes this one of the main uses of the program in the state. There are no franchised stores.

Lenders

Santander Bank, National Association holds 71 loans worth $24.4 million, Manufacturers and Traders Trust Company 31 worth $4.9 million, TD Bank, National Association 29 worth $6.0 million, Liberty Bank 13 worth $5.0 million and KeyBank National Association 10 worth $3.8 million. Santander's average loan is much bigger than the others', which shows a different mix of loan sizes. The table shows portfolios and nothing about any bank's practices.

Planning regions, not counties

Connecticut reports by planning region in this data. South Central CT has 43 loans, Capitol 37, Fairfield 23, Hartford and New Haven 22 each, Naugatuck Vly 20, Western CT 19, Southeastern CT 12, Greater Bridgeport 9 and New London 7. The record spreads across the whole state. Approvals ran from 21 in FY2017 to 12 in FY2020, and peaked at 36 in FY2025 before falling to 16 in FY2026.

A worrying early charge-off

Package store approvals from FY2017 to FY2024 lapsed at 14.2% or more, rising to 15.3% when undisbursed loans are counted. Of 101 loans disbursed in FY2017 to FY2021, 7.9% stand charged off to date and 3.0% went inside five years. Both are minimums. A gap this wide says most of the trouble came after the first years, which a lender should keep in mind when it sees a store in good health at origination.

What a Connecticut liquor study has to test

A liquor store study depends on the licence and the location. It must confirm that the licence can be transferred or obtained, and that the rules on distances and hours support the plan. Sales should be built from the trade area's households, the presence of competing package stores and supermarkets, and the share of wine, spirits and beer. Margins on alcohol are thin and inventory ties up cash, so working capital must be sized with care. A loan near $163,000 covers an inventory and a small fit-out, whereas an acquisition of a going store will need more. Repayment should survive a sales dip below what the seller reported, with the licence valued apart from the real estate by an appraiser.