SBA 7(a) Liquor Store Feasibility Study in Minnesota

Liquor retail in Minnesota under 7(a)

Package liquor is a class that Minnesota borrowers finance through the 7(a) program. SBA's files show 148 liquor store loans approved for FY2017 to FY2026, adding up to $68.6 million. The state places 13 nationally by number of loans, and liquor stores rank 8 of 39 among the classes financed inside Minnesota, a high position for a single retail format. The Minnesota median of $328,250 works out to 0.75x the nationwide liquor store median, and that median is the distinctive metric here: that gap is what marks this cell out from Minnesota's mixed record and from liquor stores nationwide. The middle half of loans runs from $146,750 to $585,250. Franchises hold 10.8% of loans.

Holders of Minnesota liquor paper, and the counties

U.S. Bank, National Association holds 17 loans worth $5.2 million. Falcon National Bank holds 14 worth $7.6 million, so its average is the larger of the two. The Huntington National Bank holds 8 worth $3.0 million, BankVista 7 worth $2.8 million, and Sunrise Banks National Association 7 worth $1.1 million. SBA names the present holder of each loan, which may differ from the originator. Hennepin County has 33 loans and Ramsey 32, nearly even, with Dakota at 15, Anoka at 11 and Washington at 9. Approvals peaked in FY2021 at 27 loans and $16.1 million and fell to 4 loans in FY2026, the lowest count of the ten years.

How these loans have performed

Cancellation took at least 7.6% of liquor store approvals in the FY2017 to FY2024 span; the ceiling, which also treats undisbursed loans as lost, is 9.1%. Seasoned liquor loans, 73 in all and funded between FY2017 and FY2021, show charge-offs at 6.8% to date and also 6.8% inside five years, which tells us that every charge-off in that group came within the first five years. Both numbers are floors that open loans can raise. They are not a prediction for a new borrower, and nothing in them is a comment on any lender's judgment.

What a Minnesota liquor store study must test

Retail liquor is licensed, so the first question for a study is whether the licence is available or transferable and what the municipality allows nearby; a plan that depends on a licence nobody has secured is not feasible. Revenue belongs on a foundation of local adult headcount and the shops already trading nearby, with the seller's own books as a cross-check and no more. Inventory is a large share of a purchase, and the loan sizes above suggest many deals are acquisitions of existing stores. The study should test coverage of debt service with a margin squeeze, and the appraisal should separate the real estate, the business and the stock. The record shows no coding limit for this cell.