How to Finance Your Liquor Store
There is no secret that liquor industry has always been at the top list in terms of income because people always buy alcohol regardless of the situation. This is why if you decided to enter this industry it is very important to do it wisely and to finance properly to get benefits from it and not shorts. Most frequently owners do not plan to finance their stores themselves as liquor business is still a risky one. In that case, we offer you some tips to make your business flourish and get proper financing.
Obtain a Liquor License
First and foremost thing to do is obtain a liquor license because the whole success of your liquor store enterprise depends on it. No one will loan you money or finance your store unless you have liquor license in place. In order to be eligible to own a liquor store you must be older than 21 years old, a citizen of a country or at least a permanent resident alien. If you conform to these simple rules, submit your application and wait for the result.
Find a Location
Before you even begin looking for location, make sure to check information about liquor store zoning regulations. As a rule you will find information about the locations and number of liquor stores operating in a given place. You should also verify how many stores are already there in order to avoid overly-saturated areas. If you have already decided about the area of operation, verify legal restrictions existing before you start doing anything.
Choose Your Products
When you have already received your license and have decided on location you should choose what you will specialize on. Some people prefer focusing only on wine and consequently look where to find white wine of the best quality, others plan to sell any kind of alcohol that is most popular among the people. Think of what you would like to offer your customers.
Financing option #1: SBA Loan Guarantee
SBA stands for the Small Business Administration which guarantees that you get a loan to purchase a liquor store. This is one of the most popular financing techniques in the industry simply because it is easy and always works perfectly. If you consider this way of financing, make sure to consult a financing advisor to clarify all the details about it.
Financing option #2: Conventional Financing
As liquor store is a high-risk industry, be ready that most banks will hesitate about giving you a loan. However, you still have a couple of options. You can either use real money to buy a liquor store or try to refinance an existing store loan. You can expect to get from $200,000 to several million dollars in total. Most frequently you will have to repay the loan between five and 25 years.
Sheldon Tate is a blogger for a line of online content hubs (comprising businesses like WineOnline.ca offering online alcohol for liquor stores and private use), who writes about a mix of business topics and areas alike. A committed explorer of online community and an influential figure in anything of significance to the business financing.