By Content Team
Updated on: July 10, 2024
A liquor store loan can be a significant factor in managing your retail store. Liquor stores require stocking hundreds, if not thousands of products. Buying power and cash flow are the two most important factors in staying competitive in the retail liquor business. It is often said that liquor store owners make their money buying inventory as much as selling it. Having the capital to purchase inventory at favorable prices (and maintain high profit margins) can mean the difference between success and failure.
Owning and operating a liquor store is as much about business loan management as it is about knowing which products to offer. American consumers are buying more and more alcoholic beverages each year, with especially significant growth expected in the whiskey and hard seltzer markets. It can be difficult for small business owners to know which types of financing to go after at which times and for what purposes. Here are eight tips to consider as you operate your store.
First thing’s first. No matter which financing option you’re planning to apply for, you’re going to need to keep track of some key data, documents, and forms. Remember: a lender giving you a loan means that they’re making a bet on your company. It means they’re of the opinion that your company is able to hold to the agreed-upon repayment terms.
So your financial and legal documents should give the impression of a company in fine financial standing with an organized, prepared ownership group. Make sure you’ve got the following list of documents ready, and review them regularly to ensure the information is accurate and up-to-date.
Possibly even more so than most other industries, liquor stores have a regular, established busy season: the holidays. Sales of alcoholic beverages spike each year in November and December. For example, in 2025, American alcohol retailers sold $13.7 billion worth of beer, wine, and liquor according to the United States Federal Reserve. In February and March of the same year, they sold a combined $10.6 billion. That’s nearly a 23% jump, and the pattern holds true every year.
It’s up to liquor store owners to meet that massive boost in demand. Seeking out a small business loan can help you make sure you’ve got plenty of bottles on your shelves in order to keep up with increased sales. You can also use business funding to upgrade or increase your storage capability, so that you can seek profit-boosting bulk discounts from suppliers.
Merchant cash advances, or MCAs, are a helpful tool for entrepreneurs running liquor stores. In particular, if you’re operating a new liquor store or if your company’s credit history has some blemishes on it, cash advances can be a helpful options.
That’s because MCAs are not loans by definition. Instead, a merchant cash advance provider purchases a percentage of your business’s future credit and debit card sales.
It works like this: you fill out a very quick and simple application. Your credit report might not even be included. What MCA providers really want to see is the volume and quantity of your credit card sales. If you’ve got sufficient sales, you’ll be offered an advance, a repayment term, and a factor rate.
Factor rates are how MCA providers make money. The rate is typically between 1.0 and 2.0, and when multiplied by the size of your MCA, you’ll see how much you’ll repay in total. If your MCA is for $8,000 to stock up on popular whiskey products and you have a factor rate of 1.2, you’ll repay $9,600 total.
Each day (or week), the MCA provider skims a percentage from your credit card transactions, typically about 10%. That means on days when your company is particularly busy, you’ll pay more. The inverse is also true. That 10% can take a significant amount of your current working capital, which is an important factor to bear in mind.
MCAs can be very expensive and paying them back quickly actually drives up their APR. But since sale volume is more important than credit, they can be a great option for companies with bad credit.
Marketing a business in 2025 requires a multi-pronged approach. And each prong can be pricy, so many liquor store business loans are used to boost marketing efforts. On-line sales of alcohol have exploded and are expected to continue to increase.
There’s print advertising, billboards, and partnerships, of course. But you might also consider a website facelift to help drive online sales, a social media promotion, or even hiring a full-time marketing specialist to help drive people in the door.
Any one of those marketing ideas can cost thousands. In total, you may want to consider loan options to help pay for getting the word out about your store.
Many companies take out business lines of credit in order to help with any short-term business needs that may or may not pop up.
Business lines of credit function as loans that are available when you need them. In a traditional bank loan, the borrower receives the full loan amount as a lump sum. Payments typically begin immediately.
Not so with a line of credit. Instead of an upfront deposit, you’re given a credit limit and can draw on the line of credit up to that limit. You’ll only need to make payments and pay interest on the money spent under that credit limit.
A business line of credit is a powerful tool to make bulk purchases ahead of busy holiday times and take advantage of quantity discounts on popular brands.
Having a line of credit available means that if a large expense should pop up, your company has a readily-available way to pay. If your walk-in beer cooler breaks down, you have the cash available to repair or even replace it without having to go through the arduous process of applying for a term loan. Or if your spirits supplier offers a steep bulk discount on a popular brand, you can use your line of credit to secure enough to get you through the busy season with high profits.
Line of credit may or may not require collateral, and are a helpful choice to protect your company against any unexpected problems or to take advantage of timely opportunities.
Another way to boost sales is to upgrade your commercial real estate. That could mean using your business financing to replace outdated display cases, upgrade your point-of-sale system, or even redoing your storefront. In fact, you could use a loan to expand into a second location.
Renovations can also help create a more effective and efficient sales floor. You can use new or updated shelving to maximize the amount of product you’re able to display. Or you can create areas within your store to safely store and display your premium products
You could take your financing to upgrade your security system or even your inventory tracking software. No matter how you choose to renovate your space, be it through technology upgrades or physical space improvements, an upgraded store can lead to growth.
The liquor and alcohol industry is full of niche products and changing trends. If you want to really grow your business, you might consider entering into a new niche or selling new products to help your store stand out. Stocking up on niche products like sake, mead, moonshine, craft beer, and even specialized aperitifs could help differentiate your liquor store from its competitors.
And of course, buying a bottle or two won’t be enough to drive profit. If you want to ensure that you’ve got enough product to keep customers coming back for your rare or unusual offerings, you’ll need to keep some on the shelf. Liquor store financing can help.
When your company is just a startup, you may have taken on some less-than-favorable debts. Interest rates for newer companies are often high, since the age of your credit history is a significant part of the credit score calculation.
So if your company has a couple years of steady annual revenue and a better credit score, you might consider refinancing your old debts.
Refinancing is the act of using new debt to pay off old debts. For business owners whose companies have grown more creditworthy since receiving early loans, refinancing can lower monthly payments and thus boost cash flow.
What could your liquor store do with some extra money every month? Refinancing debt can help put you in a position to use that extra cash to renovate, upgrade, stock up, or pay your employees.