Our Guide to Liquor Store Loans
When running your store, you’re responsible for following liquor laws, restocking inventory, and providing helpful customer service, among other tasks. In addition, liquor store owners are now tasked with following additional health standards due to the COVID-19 pandemic.
Whether your business is flourishing and you need to meet demand, or your business has struggled in the past year, having a business loan can be extremely beneficial. In this post, we’ll explain how to get a liquor store loan and review four ways that you can utilize this funding to grow your liquor store.
How to Get a Liquor Store Loan:
If you’re interested in receiving financing for your liquor store, you should first start by researching your options.
Once you determine the type of loan you’d like to pursue, make sure that you’re fully aware of the lenders qualifications. That way, you can expedite the funding process. If for some reason you don’t meet lenders standards, you can move onto another option.
After you receive a loan for your liquor store, you can focus on how you’ll use your funding to promote business growth. In the section below, we’ll provide ideas on how you can best utilize your loan.
How Can You Use a Liquor Store Loan?
1. Hire Additional Employees
As you likely know, being understaffed can be extremely detrimental to your business. You need employees who can assist customers, restock inventory, and manage the register, just to name a few examples.
In addition, if an employee is sick or on vacation, someone will need to cover their shift. If you’ve noticed that your store has been understaffed, you should use your loan to hire more employees.
2. Purchase More Inventory
Have you noticed that sometimes your customers leave empty handed because you don’t have the inventory they were looking for in stock? If so, it might be beneficial to use your loan to purchase inventory.
On the other hand, you may be receiving so many customers that inventory is flying off the shelf. During the COVID-19 pandemic, liquor stores have remained a popular industry, so you may need a loan to meet this ongoing demand.
Many liquor store owners run into inventory issues because they can’t afford to place larger orders, or they simply don’t want to spend invest in more options. Sadly, this can be a crucial mistake, because if patrons realize that other local liquor stores have a wider selection, they probably won’t return to your establishment.
To avoid this, use your small business loan to order more of existing inventory or purchase new options. You could also offer glassware, gift bags, corkscrews, and other accessories to accompany liquor purchases.
3. Open Another Location
If your liquor store is already profitable, you should consider how you can continue increasing sales. For example, you could open an additional liquor store to serve more customers in a different geographic area.
Of course, opening another liquor store comes with plenty of expenses. You’ll need to pay for monthly rent or purchase commercial real estate. Also, you must be able to afford utility bills, interior décor, payroll, and other inventory. Naturally, to pay for these costs, having ample cash flow is imperative.
Although you should invest in your new store, it’s important that you don’t neglect your existing establishment. With a term loan, you can make investments in your new location without dipping into your original store’s cash flow.
4. Increase Marketing Spend
If your liquor store isn’t profitable, you should focus on acquiring new customers. Using your business loan, you can invest in different marketing ideas, such as:
- Online advertising
- Register for business listings
- Print advertisements in local publications
- Social media advertisements
There are numerous ways to promote your liquor store to nearby patrons. Since you have a loan, you’ll be able to try different marketing ideas, and then can invest in the strategies that are most profitable.
Other Liquor Store Financing Options:
Although many liquor store owners pursue term loans, there are other working capital options that you can pursue.
- Credit Cards: With a business credit card, you can charge expenses to your account, and depending on the card, you may earn rewards in the process.
- Merchant Cash Advances: Most likely, your liquor store accepts credit card payments. If this is the case, you might qualify for a cash advance. With this type of financing, you’ll receive a lump sum, in exchange for a percentage of your store’s future credit card sales.
- Business Line of Credit: Depending on your financing needs, you could apply for a revolving or non-revolving business line of credit.
- Small Business Administration (SBA) Loans: If you haven’t been able to qualify for other financing options, you can pursue financing through an SBA lender. They offer different loan options to U.S.-based businesses that have exhausted traditional funding sources.
How Will You Invest in Your Liquor Store?
Now that we’ve explained how you can utilize liquor store financing, consider how you can improve your store. Every business is different, so you should determine the areas in which your business needs to be upgraded. Don’t be afraid to ask your existing customers, employees, or other business owners for their feedback. This can be very useful as you prepare to invest in the future of your store!
Editor’s Note: This post was updated for accuracy and comprehensiveness in January 2021.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.