SBA 7(a) Liquor Store Feasibility Study in Ohio

Very small loans for package stores

Ohio liquor stores that borrow under SBA 7(a) borrow little. The median of $103,200 comes to only 0.23x the typical figure for the class across the country, and the middle half of the 119 loans approved between FY2017 and FY2026 spans $50,000 to $394,300. All together they come to $38.2 million. Ohio stands 15th among states by count, while liquor store ranks just 17 of 39 inside Ohio, so this is a niche in a large economy. Franchises hardly appear: the share is 0.84%, which makes this an independent owner-operator business in nearly every case.

A single bank, and a fading pipeline

The holder table is dominated by The Huntington National Bank, with 55 loans worth $7.3 million, which is a small average per loan. First Financial Bank follows with 9 loans and $3.3 million, and Telhio Credit Union Inc has 8 for $867,200. Franklin County has 25 loans, Cuyahoga and Hamilton 16 each, Trumbull 7, Lake 6, and Delaware, Lucas, Montgomery and Stark 5 each, with Summit at 4. The annual record thins sharply: 19 loans and $3.0 million in FY2017, 11 and $3.1 million in FY2021, and a single loan for $25,000 in FY2026. Any borrower should ask what changed in the program's appetite for this class, a question a market study alone cannot answer.

Cancellation and charge-off floors

Loans cancelled once approved reach at least 14.0% of the earlier approvals, and 15.0% at the ceiling, which is a high mark for a class this small. Among the 66 loans that funded early, at least 1.5% are charged off so far, while the reading over five years of approval is 0.00%. With open loans still in play, treat both as minimums. The gap between the high cancellation rate and the low charge-off rate suggests that most of the friction occurs before money moves, in the underwriting and the closing, not after the store opens.

What the Ohio study should test

For a package store the central question is licence and location, and a feasibility study has to establish both before it models sales. Whether a permit is available or transferable is a matter for state regulators, not for us, but the study should flag it as a condition. Then it tests the trade area, the competing outlets, and the customer base within a short drive, along with the purchase price of the business or the build-out against a ticket near $103,200. Inventory is a large share of the capital need, and the appraisal will treat it separately from the real estate. The payment must stay covered at a cautious weekly sales level, since a lender will set it with the cancellation and charge-off floors above.