Acquisition Loans for Buying a Liquor Store

What This Is

• Financing used to purchase an existing liquor store as a going concern
• Can cover the purchase price of the business, inventory at closing, and associated transaction costs
• SBA 7(a) is the most commonly used program for liquor store acquisitions

What Lenders Evaluate for Acquisitions

• Acquisition price — is it reasonable relative to revenue and earnings?
• Financial performance of the target business — typically 2–3 years of tax returns and P&Ls
• Current liquor license status — is it active, in good standing, and transferable?
• Inventory valuation — what is included at sale, and what is its condition?
• Lease terms — is the lease assumable? How much time remains?

Down Payment Requirements

• SBA 7(a) acquisitions typically require 10–20% down
• Conventional lenders may require more depending on the risk profile
• Seller financing (seller carries a portion of the purchase price) can sometimes supplement the down payment

Common Risks Lenders Screen For

• Pending license violations or compliance issues
• License that is not transferable under state law
• Lease that cannot be assigned to a new owner
• Revenue that is not well-documented or appears inconsistent