SBA 7(a) Liquor Store Feasibility Study in Rhode Island

The smallest liquor store loans on record for a small state

Rhode Island liquor stores borrow at about a third of the nationwide level: the median loan of $157,500 is 0.36x the national 7(a) figure, and our test marks this as the distinctive metric. The class is highly placed locally, 3 of 39 among Rhode Island's classes, even though the state is 24 among states by count. In all, 46 approvals total $24.4 million, with a middle half from $100,000 to $590,000. Franchise share is 0.00%.

Providence and two banks

Providence County has 33 of the loans, Kent 6, Newport 4 and Washington 3, which makes the county list very concentrated. Eastern Bank holds 13 loans worth $6.3 million, and Rockland Trust Company 5 loans worth $3.8 million, in SBA's current-holder records. Approvals ran at 3 loans and $730,000 in FY2017, 7 loans and $2.2 million in FY2018, 6 loans and $4.9 million in FY2022, 8 loans and $2.2 million in FY2025, and none in FY2026.

Cancellations on earlier approvals reach 10.5% at the floor, with the same ceiling. Too few early loans funded for any charge-off rate to be stated, and a blank is not a zero.

Testing a Rhode Island store

Retail licensing in Rhode Island is handled locally, and a feasibility study must confirm the licence, its transfer on a sale, and the rules on location. Customers come from a very small geography, so competing stores within a few minutes should be counted and the study should set sales per store against the population actually served, instead of borrowing a state average. The small median loan suggests many purchases of existing stores and modest improvements. Inventory financing and the owner's wage should be shown explicitly, along with shrinkage and the effect of nearby state border competition on prices. Coverage must hold if sales slip when a new competitor opens, and the study should show the margin of safety in plain terms. Since many stores lease, term and renewal rights are central, and the appraisal will rely on the business and licence more than property.

With 46 approvals in the record and a median of $157,500, a Rhode Island buyer is usually purchasing an established store. The study should therefore reconstruct historic sales from tax filings or point-of-sale reports, test whether they depend on the seller's relationships, and show how a full year of ownership would repay the debt.