SBA liquor store loans by the numbers
From FY2015 through June 30, 2026, the SBA approved 6,756 liquor store loans under 7(a) and 298 under 504, net of cancellations.[1] Purchases are a far bigger share than in SBA lending overall: from FY2019 on, buying an existing store accounts for more than a third of 7(a) liquor loans, against about one in nine across all industries.
SBA liquor store loans (NAICS 445310 and 445320)
| Measure | Figure |
|---|---|
| Median 7(a) loan, FY2015 to June 2026 | $400,000 |
| Middle half of 7(a) loans | $150,000 to $855,000 |
| Buying an existing store (FY2019 on) | 35.5% of 7(a) loans, median $678,500 (all industries: 11.1%) |
| Store purchases with terms of 25 years or more | 23.8% |
| Share of all liquor store loans made through 504 | 4.2% |
| Charged off, 7(a) loans approved FY2010 to FY2016 | 4.6% (all industries: 7.0%) |
Source: SBA 7(a) and 504 FOIA loan data as of June 30, 2026. Liquor stores under both the 2017 and 2022 industry codes. Charge-off rates count loans, not dollars.
Most store purchases run on 10-year terms, which points to deals made of inventory, fixtures, the license and goodwill, with the building leased.
Three ways into a store
- Buying a store in leased space as a first-time owner is an Initial Acquisition. At least 10% down that can't be waived, and the seller's history must show 1.25 coverage.[2]
- Buying the store with its building follows the same rules, plus a longer blended term on the real estate share.
- Adding a second store as an existing owner can qualify as a Business Expansion if your company buys 100% of the other store's ownership. The coverage floor drops to 1.15.
Nothing in the SBA's rules bars a liquor store. The size limit for beer, wine and liquor retailers is $10.0 million in average annual receipts, and in a purchase the store you buy is counted together with your business.[3] Beyond that, the questions are the ones any purchase faces, plus the license, the inventory and the cash.
The liquor license: liened, but likely not counted
A liquor license is a privilege your state grants. Your state decides who may hold it, whether it can move to a new owner, and how long that takes. No national guide can tell you your state's rules, this one included, so read them yourself and confirm your reading with an attorney who practices alcohol law in your state.
The SBA's part is narrower. In a purchase, the lender must take a security interest in every asset conveyed, and SOP 50 10 8.1 names a transferable liquor license as its example. The SOP's fully secured test counts real estate, equipment, fixtures and inventory at set discounts, and no line on that list values a license. The most reasonable reading is that the license carries a lien but earns no collateral credit. Your lender decides how to treat it, so don't count on the license to close a collateral gap.
In the book's main example, Grace Okafor, a grocery operations manager for 14 years, buys a 4,500 square foot store in a neighborhood shopping center for $900,000. Her purchase agreement puts $150,000 of the price on the license. That is only what she and the seller agreed for this deal, not a market price.
Two SBA clocks, one state clock
- The 90-day rule. The lender must have evidence of every license the business needs within 90 days after the loan finishes funding, and it can't sell the loan until it does.
- The 5-day escrow. An SBA closing escrow can last no more than 5 business days. It is for closing mechanics, not for holding your loan while the state reviews your application.
A state transfer can take far longer than either. Any longer holding arrangement comes from state law and your purchase contract, not from the SBA. Because a loan missing a license can't be sold, many lenders want the transfer approved, or nearly so, before they fund. Put your state's realistic approval window, your closing date and the 90-day deadline on one calendar, and write a license contingency into the purchase agreement.
A stock purchase doesn't avoid the state. Many states treat a change in who owns or controls the license holder as an event that needs notice or approval. There is a federal layer too: a retail dealer's registration with the Alcohol and Tobacco Tax and Trade Bureau is personal to the one who registered, so a buyer of an existing store must register as a new business, and no one may sell at a location until it is registered.[4]
Inventory stays in the price and counts at 10%
Only owner-occupied real estate comes off the price when the lender sets the Business Purchase Price. Inventory, fixtures, the license and goodwill all stay in. A store with heavy stock reaches the $350,000 line, above which an independent valuation is required, sooner than its goodwill alone would suggest.
In a purchase, the lender must take a lien on the store's inventory, and only 10% of its current book value counts toward the fully secured test. Grace's $900,000 price breaks down this way.
How a lender counts Grace's collateral
| Asset | Price allocation | Counted toward fully secured |
|---|---|---|
| Inventory | $250,000 | $25,000 (10%, lien required) |
| Fixtures and coolers | $60,000 | $6,000 (10% as fixtures, the conservative case) |
| Liquor license | $150,000 | Likely $0 (liened, no valuation line) |
| Goodwill | $440,000 | Nothing |
| Total against an $864,000 loan | $900,000 | $31,000; shortfall about $833,000 |
Walk-in coolers may count as equipment rather than fixtures, which can raise the credit, especially with an orderly liquidation appraisal. Ask your lender how it will classify them.
For detailed calculations and real examples, see the FUNDED Liquor Store Guide.
A gap that size is normal for a purchase in leased space. When the loan isn't fully secured, the lender must take available equity in personal real estate the owner holds alone, though not where the equity is under 25% of the home's value, and must consider a lien on a home owned jointly with a spouse. Grace's lender takes a lien on the home she owns jointly with her spouse, so her spouse signs too. On a Standard 7(a) loan that isn't fully secured, the SBA also requires life insurance in the amount of the shortfall for a business that depends on one owner. A shortfall alone is not a reason to decline the loan.
Two practical points. Hazard insurance is required on pledged collateral for 7(a) loans over $50,000, so price coverage on the stock early. And the SOP has no rule for the inventory count at closing, so settle in the purchase agreement who counts, when, and how the price adjusts.
Cash sales and the tax return
Some sellers say the store "really does more" than the returns show. A lender can't use that. It reconciles the seller's financials to IRS tax transcripts before the first dollar goes out, checks the numbers the business valuation relied on against those same transcripts, and can't count any cash flow adjustment it can't support. Projections can't carry a purchase either.
So price your offer on the store that exists on paper. If the seller sets the price on unreported income, the valuation won't support it, and the SBA says any amount paid above the valuation must be made up with equity. Before you talk price, lay card processor statements and point of sale reports next to the tax return. If they don't tie, you want to know before your lender does.
At a Business Purchase Price of $3 million or more, the lender also needs a Quality of Earnings report, and it must include a Cash Proof that rebuilds receipts from bank statements and ties them to the income statement and the tax return.
Lottery and gaming: the one-third test
Many stores sell lottery tickets, and some host licensed gaming. A business that gets more than one-third of its prior-year gross revenue, including rental income, from legal gambling is not eligible. Commissions from state lottery sales under a state license, and gaming licensed and supervised by the state, can stay eligible within that limit. A business whose purpose is gambling, such as skill games, is ineligible at any percentage.
The SOP refers to lottery commissions, so the natural measure is the commission the store keeps, not the face value of every ticket sold. How the seller's books record that flow, and how your lender reads it, decides the answer. Ask for the lottery commission statements and a revenue breakdown with lottery, gaming and any machine rental income on separate lines.
Down payment and seller notes on a purchase
For a first-time buyer, the SBA minimum is 10% of total project cost, and it can't be reduced or waived. A seller note counts toward it only on full standby, meaning no principal or interest for the life of the SBA loan, and limited sources like that can cover no more than half of the required injection. A temporary exception for veterans: from November 11, 2026 through September 30, 2027, the SBA has announced that an eligible veteran purchasing an existing business with a 7(a) loan may raise the full 10% from these sources (SBA News Release 26-117); ask your lender how it applies.
Grace needed $96,000. She put in $56,000 of cash, and the seller carried $40,000 on full standby, under the half cap of $48,000. Many lenders ask for more than the minimum. In an Initial Acquisition, the seller can stay on only as a consultant, for up to 24 months.
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Grace's deal, start to finish
Every number below comes from the book's worked example. The interest rate is illustrative.
Buying a store in leased space through SBA 7(a)
| Item | Grace's deal |
|---|---|
| Receipts on last tax return | $2,300,000 |
| Purchase price (inventory, license, fixtures, goodwill) | $900,000 |
| Independent business valuation | $900,000 |
| Closing costs and working capital | $60,000 |
| Total project cost | $960,000 |
| Equity injection (10%) | $96,000: $56,000 cash + $40,000 seller note on full standby |
| SBA 7(a) loan | $864,000, 10 years |
| Annual debt service at an illustrative 7.50% | $123,070 |
| Documented cash flow, after a market salary for a store manager | $205,000 |
| Debt service coverage | 1.67 (floor 1.25) |
| Global (household) coverage | 1.47 (floor 1:1) |
| Upfront guaranty fee, FY2027 | $22,680 on the $648,000 guaranteed portion |
No real estate or leasehold is pledged, so the SOP requires no environmental review, though her lender may still ask. The store clears 1.25 with room; the collateral shortfall is covered by her home, not by the license.
For detailed calculations and real examples, see the FUNDED Liquor Store Guide.
Buying the store and its building
Victor Reyes, a beverage distributor sales manager for 18 years, buys one of his customers' stores together with its building for $1,500,000. The lender subtracts the $700,000 appraised real estate, so his Business Purchase Price is $800,000, and the independent valuation comes in at $820,000.
On one 7(a) loan, the real estate share can run up to 25 years and everything else is limited to 10, weighted and rounded. His $1,395,000 loan comes to a 17-year blended term. Because the building is in the deal, the lender may add back the rent the store used to pay its owner. The store has to occupy at least 51% of the building, and Victor's uses all of it.
Victor's purchase with the building
| Item | Amount |
|---|---|
| Purchase price | $1,500,000 |
| Building and land appraisal / Business Purchase Price | $700,000 / $800,000 |
| Total project cost (with $50,000 closing and working capital) | $1,550,000 |
| Equity injection (10%, all cash) | $155,000 |
| SBA 7(a) loan | $1,395,000, 17-year blended term |
| Annual debt service at an illustrative 7.50% | $145,422 |
| Documented cash flow, with the seller's rent added back | $238,000 |
| Debt service coverage / global coverage | 1.64 / 1.22 |
| Building counted at 85% for collateral | $595,000 |
| Upfront guaranty fee, FY2027 | $36,734.38 |
A liquor store is not special purpose property under SBA rules, so the 25-year term applies only to the real estate share.
For detailed calculations and real examples, see the FUNDED Liquor Store Guide.
Owning the building brings an environmental review. Liquor retail is not on the SBA's list of environmentally sensitive industries, so on a loan over $250,000 the review starts with an Environmental Questionnaire plus a Records Search with Risk Assessment, and becomes a Phase I if the site isn't low risk. The site's history can change the starting point: a former gas station or repair shop starts with a Phase I, and a center where a dry cleaner ever operated needs a Phase I followed by a Phase II.
Buying a second store
Dee Harris has owned her store for five years and finds a second one across town for $1,200,000, in leased space. Her company buys 100% of its stock, so it qualifies as a Business Expansion: the two stores share the same four-digit industry group, and the coverage floor is 1.15 measured on both together. Her existing store's $260,000 of cash flow plus the target's $190,000 covers $208,247 of combined debt service 2.16 times.
On its own, the second store covers only 1.19 of its new $160,247 payment. If Dee's company bought the assets instead of the stock, the deal would be an Initial Acquisition tested at 1.25, and the target's own numbers would fall short. Lenders differ on how much weight they give a buyer's other store in that case. Talk to your lawyer and your lender together before you choose a structure.
Her lender could have reduced the 10% injection on an expansion and chose not to, so she put in $125,000 against a $1,125,000 loan. One caution for convenience store owners: a convenience store sits in a different industry group than a liquor store, so a convenience store owner buying a liquor store doesn't qualify as an expansion. The code on the tax return decides it, not how the store looks from the street.
SBA 7(a) or 504 for a liquor store
Which program fits which store deal
| Your deal | Usual program | Minimum you put in |
|---|---|---|
| Buying a store in leased space | SBA 7(a), 10 years | 10% of total project cost, can't be waived |
| Buying a store with its building | SBA 7(a), blended term | 10% of total project cost |
| Same purchase, with the building in a separate 504 | 7(a) for the business, 504 for the property | 10% on the 7(a); 10% or more on the 504 piece |
| Buying 100% of the stock of a second store | SBA 7(a) | 10%; your lender may reduce it |
| Buying a building for a store you already run | SBA 504 | 10% (15% for a new business) |
On a 504, a CDC may treat a new owner of an established store as a new business and ask for 5% more. Inventory, the license and goodwill can't go in a 504.
For detailed calculations and real examples, see the FUNDED Liquor Store Guide.
On fees, the FY2027 0% upfront fee reaches a liquor store only if the loan is $700,000 or less and the store is in a rural county. Liquor stores are not on the food supply chain list that gets the 0% fee regardless of location.
How to finance a liquor store with an SBA loan
- 1
Learn your state's license rules first
Find out whether the license can transfer, who may hold it, and how long approval takes. Confirm it with an attorney who practices alcohol law in your state.
- 2
Line up the clocks
Put the state's approval window, your closing date and the SBA's 90-day license deadline on one calendar, and add a license contingency to the purchase agreement.
- 3
Price the store on paper
Compare tax returns, card deposits and point of sale reports. Income that never reached a return won't count, and any price above the valuation is equity.
- 4
Check lottery and gaming income
Measure lottery commissions and licensed gaming, including machine rental splits, against one-third of prior-year gross revenue.
- 5
Run the collateral math
Inventory counts at 10%, fixtures at 10% unless they qualify as equipment, and the license likely at zero. Plan for a lien on your home if its equity is 25% or more of its value (required if you own it alone, considered if you own it with a spouse).
- 6
Plan the injection on total project cost
10% at least on a first purchase. A seller note counts only on full standby, and limited sources cover no more than half.
- 7
Choose stock or assets with your lender in the room
For a second store, the structure decides whether you are tested at 1.15 or 1.25. Register the store with TTB as a new business before you start selling.