SBA 7(a) Liquor Store Feasibility Study in Delaware

Delaware liquor stores: small loans, seventh in the state

In Delaware, liquor stores are the seventh-ranked class among 39, at 7 of 39, even though the state is 29 among states by loan count. A median of $150,000 amounts to only 0.34x the nationwide level. The interquartile band opens at $50,000 and tops out at $827,500. The record holds 27 approvals worth $15.9 million. Franchising is 0.00%.

Three banks and three counties

The lender table lists Manufacturers and Traders Trust Company (7 loans, $2.3 million), TD Bank, National Association, at 6 loans and a mere $340,000, along with Wilmington Savings Fund Society FSB, which has 5 loans and $7.0 million, the most dollars per loan of the three. SBA's file records the present holders. New Castle County has 19 loans, Sussex 7 and Kent 1, so New Castle County carries most of the class. Approvals ran from 5 loans and $793,500 in FY2017 and 6 loans and $900,000 in FY2018 to a year of none in FY2019, then 4 loans and $4.1 million in FY2022 and 2 loans and $815,000 in FY2026.

For Delaware stores the data yields no cancellation share and no charge-off share, since the loans are few. Loan Analytics prints neither, and neither is zero.

Testing a Delaware store

A study should say how much of the store's sales come from nearby residents and how much from shoppers crossing a state line. Confirm the licence, how it passes on a sale, and any siting rules. Size inventory and turns, and allow for shrinkage and theft. Review historic sales, the owner's own add-backs and the lease. Competing stores and grocery outlets licensed to sell spirits should be mapped. Run coverage after the owner's wage and the carrying cost of inventory, using a lower sales case. Appraisal rests on the business and the licence more than on property.

Delaware's three counties give a study a simple trade-area test: New Castle's 19 loans dwarf the other two. The study should therefore state exactly which county and which corridor the store serves, and compare competing stores along that route and not across the whole state.