SBA 7(a) Liquor Store Feasibility Study in Texas

Independent shops, near-national loans

Texas liquor stores took 272 SBA 7(a) loans and $208.4 million from FY2017 to FY2026. This is an independent-owner class, with just 1.1% franchised, and the median loan of $487,500 is 1.11x the 7(a) median for liquor stores nationally. The central half spans $247,500 to $1.0 million. Texas is 7 among states for the program, while liquor stores sit 13 of 39 within Texas.

Floors

Cancellations after approval were 8.5% of FY2017 to FY2024 approvals or more, 8.9% with undisbursed loans included. Of 106 loans disbursed in FY2017 to FY2021, 5.7% show as charged off to date and 3.8% inside five years. Both are floors, so the class has not finished playing out; with a cohort this small, a handful of loans can shift either percentage. A lender reading this page should keep the 8.5% cancellation figure beside the charge-off floors when judging how much of a liquor store pipeline reaches maturity.

Lenders and dollars per loan

Metro City Bank holds 17 loans, but its $29.4 million shows large awards, well above the $13.6 million of Celtic Bank Corporation, which has 15. Three more lenders hold 11 loans each: The Huntington National Bank ($6.6 million), Wells Fargo Bank National Association ($5.9 million) and Fifth Third Bank ($4.0 million). Those names are taken from SBA's current-holder field. Dallas County leads the map at 49 loans, ahead of Tarrant (39) and Harris (32); Collin has 25, and Denton and Travis 18 apiece.

Years

Volume was strongest in FY2024 with 40 loans and $28.2 million, and weakest in FY2020 with 13. FY2026 shows 29 loans and $20.6 million so far.

Testing a Texas liquor store

A Texas liquor-store study should test the licensing position, since a permit is the asset a lender is financing; the trade area and competition from grocery chains; inventory and its financing; and the lease or property value. Because dollars are large relative to the count, the study should break out the real estate, the inventory and the goodwill. Coverage should hold in a weak sales year, and the plan should address how the permit transfers on a purchase and what occurs if the owner is unable to renew it.