A bottle shop bought as a going business can be repaying four debts together. The first is the purchase loan that paid for the business itself: its goodwill, its packaged liquor licence and the first stock. Goodwill is the value beyond the shelves and fridges, because customers already choose this store. The licence is the permit to sell alcohol for drinking away from the premises. The others are an equipment loan on the cool room and glass-door fridges, an overdraft holding the stock, and a short-term loan drawn for a large seasonal order. Each debt is taken in turn, followed by what happens to the store's monthly debits and its overall interest bill when the three term loans become one.
Is the purchase loan repayment still the largest debit on the statement once the supplier invoices are paid? Are you still repaying a short-term loan for stock that sold weeks ago? Is the cool room compressor getting older while its loan has years to go? Have the loans been left as they are because each debit lands in a different week and you would rather be on the shop floor?
The ATO's small business benchmarks, built from 2023-24 tax returns, put cost of sales at 74% to 79% of turnover for bottle shops and liquor retailers turning over more than $2M, with an average of 76%. At that average, about 76 cents in each dollar taken at the counter pays for the stock sold, and every loan repayment comes from what is left.
From the purchase loan down to the cool room and the overdraft that funds the stock, Ardent Capital Group can help refinance the loans your store carries. Bring the list of what the shop owes and we would be glad to look at it with you.
What each of the store's loans paid for
When you bought the store as a going business, you bought a shop already trading, with its customers, licence and stock in place. Part of the price was the goodwill, and part was the licence.
It helps to sort the debts by what they bought, since that decides what a refinance can do with each. After the purchase, stock is replaced from the takings, from supplier trade terms, from an overdraft, or from a short-term loan drawn before a busy period. Trade terms are the days a supplier allows before its invoice must be paid. An overdraft is a limit on the business account that the store draws on and pays back as stock sells. The cool room, the glass-door fridges, the shelving and the counter may sit on an equipment or fit-out loan of their own.
Takings arrive every trading day as card settlements and cash. Supplier invoices, rent and loan debits go out on their own dates. Where the store belongs to a banner or buying group, a network of stores sharing one name and buying together, that group sets its supply terms and promotions. The membership agreement therefore sits beside the loans, even though it is not one.
In Queensland a bottle shop can only be operated by a hotel under the state's liquor licensing laws. There, the store's debts sit inside the hotel business that holds the licence. In the other states and the territories, an independent store borrows in its own name or its owners' names.
The owners' home loan, car loans and any credit cards that have paid for stock go on the list too. They sit in the application beside the store's own debts.
Example: a leased bottle shop's four debts
Seeing a store's debts side by side makes it clearer where each month's money goes. These figures are illustrative, built around a debt mix we can assist with. The owners bought a suburban store as a going business four years ago and rent the shop.
The monthly debit for each loan is what that loan takes from the store's account.
| Loan | Balance | Rate | Months left | Monthly debit |
|---|---|---|---|---|
| Business purchase loan: goodwill, licence and opening stock | $380k | 9.5% (assumed) | 48 | $9,547 |
| Equipment loan: cool room and glass-door fridges | $70k | 11% (assumed) | 30 | $2,679 |
| Short-term loan drawn for the Christmas order | $45k | 18% (assumed) | 8 | $6,011 |
| Stock overdraft on a $150k limit | $110k drawn | 11% (assumed), interest only, with nothing off the balance | Ongoing | $1,008 |
| Total | $605k | $19,245 |
The Christmas order's short-term loan still has $45k owing at an assumed 18%. With eight months left, it takes $6,011 a month, about 63% of the purchase loan's debit on a far smaller balance.
Until the short-term loan is repaid, the four debts take about $19,245 a month. The rates are assumed so the sums can be shown. They are 9.5% on the purchase loan, 11% on the loan for the cool room and on the overdraft, and 18% on the short-term loan. A refinanced business loan is assumed at 8.5%, and borrowing against the home at 6.5%. None of them is a current rate.
How a refinance moves the store's repayments
A refinance pays out one or more of the store's loans with a new loan. For a bottle shop, that changes how much of the counter takings stays for supplier invoices, wages and rent.
Refinancing moves three levers: the interest rate, the months left and the security.
- Rate. Over the same months, a lower rate cuts the monthly debit and the total. On the $380k purchase loan, one percentage point less over the 48 months left saves $181 a month and about $9k overall. The lender prices the loan after reading the store's takings, what secures the debt and each owner's credit record.
- Term. Stretch the months and each debit gets smaller. The store then pays interest for longer, so the lifetime cost grows. That trade can make sense when a short loan is pulling cash out of the till right before the Christmas build-up. It helps to have the added cost on paper before anything is signed.
- Security. If the debt goes unpaid, security is the asset the lender is entitled to take. A loan backed by real property is usually priced below one backed by the fridges or by a general security agreement, a charge over all the business's assets. Pledging it, though, makes that property security for what the shop owes.
On a principal-and-interest loan, each debit splits two ways. Part is interest, worked out on whatever balance the store still owes. The rest is principal, which brings that balance down. Early on, interest takes the bigger bite. As the purchase loan shrinks, more of every debit goes to principal.
Worked example: the first repayment on the purchase loan
One month's debit on the purchase loan shows how a repayment divides between interest and real progress on the balance.
At an assumed 9.5%, a month's interest on $380k is about $3,008. Of the $9,547 repayment, about $6,539 reduces the balance in that first month. The principal part then grows with each repayment after it.
Refinancing each loan the bottle shop carries
Each of the store's debts paid for something with its own lifespan: the business itself, the stock on the shelves or the refrigeration.
The loan that bought the business
For an owner who bought an existing store, this is the loan that paid for the purchase itself. It paid for goodwill, the licence and the stock on the shelves at settlement.
It can be secured by a general security agreement over the business, the owners' guarantees and, for some owners, property. Under a guarantee, an owner agrees to repay personally if the business cannot. Goodwill and a licence hold their value while the store keeps trading.
Refinancing can move it to another lender, a different rate or a different number of months. Where the store has traded well since purchase, a refinance can also look at releasing a guarantee or a property that was needed at the start. The stock bought with this loan sold long ago, so adding years to it means paying for that first order for longer.
Stock: the overdraft, supplier terms and short-term loans
Stock is bought again as soon as it sells. A bottle shop keeps its shelves and cool room stocked all year. That makes the stock overdraft a standing float, covering the gap between paying a supplier and selling the stock, rather than a debt that runs down.
Converting the stock overdraft to a term loan clears the drawn balance. The store then has no limit to dip into when the next peak arrives. In the example, the $110k drawn would cost about $1,742 a month over 7 years at 8.5%. That compares with $1,008 a month of interest today, and no limit would be left for the next Christmas order.
A short-term loan for a seasonal order is still being repaid after that stock has sold. Rolling it into a longer loan lowers the debit. It also spreads the cost of stock already sold over more months. A refinance leaves supplier trade terms as they are.
The cool room and glass-door fridges
The cool room and fridges hold the stock customers want cold, and they run around the clock. The walk-in cool room with its compressors and condensers, the glass-door display fridges and the shelving behind them are the store's largest equipment items. A loan on them is secured by that equipment.
Before refinancing it, it helps to set the months left against how long the refrigeration has left to run. Effective life is the number of years an asset can be used to produce income, taken from the ATO's determination or worked out by the business. It is a tax figure, not a promise of how long the equipment will run. Your accountant can say what effective life the cool room and fridges are depreciated over.
Where the compressors are close to replacement, the refinance can clear the old equipment debt and fund the new refrigeration together. The only equipment loan left is then on fridges the store actually runs.
The lease, or the freehold you own
A store may trade from a rented shop, or the owners may hold the building too. A leased shop has a fit-out of shelving, the counter, CCTV and the cool room build, and much of it stays behind if the store moves.
A fit-out loan that runs past the end of the lease would leave debt on shelving the store may have to leave behind. The lease's make-good clause matters here too. That clause lets the landlord ask for the shop to be handed back as it was before the shelving went in.
Owners of the freehold, meaning the building and the land, can refinance the property loan itself. Bank terms on commercial property commonly run 10 to 15 years and non-bank terms 25 to 30. Our bottle shop refinance page covers the store you own, including how the licence and trade are valued with the building.
Merchant cash advances and the ATO
An advance against future card sales, or tax that fell behind in a slow stretch, can sit on the list beside the loans.
With a merchant cash advance, the store receives cash up front. It hands back a slice of each day's card takings, or a set daily debit, until a fixed dollar sum is repaid. No rate appears on the statement. Put what is left to repay next to the interest a term loan would cost across the same months, and the two can be compared.
The store may have fallen behind on GST, the goods and services tax collected at the counter. It may also be behind on PAYG withholding for the casuals, or on their super, the retirement savings an employer pays for staff. PAYG withholding is the tax taken out of staff pay and paid to the ATO. An ATO payment plan breaks that debt into instalments, with the general interest charge still building on most plans. That charge is the ATO's interest on tax paid late. Loan interest the shop pays may be claimable, while ATO interest charges incurred from 1 July 2025 are not. How that plays out for the store is a question for your accountant.
Combining the bottle shop's loans
Putting the purchase loan, the loan on the cool room and the loan for the Christmas order into one debit simplifies the store's month, and its cost depends on how many months the combined loan runs.
Example: the store's $495k refinanced four ways
The overdraft is left aside in every option. Each option is measured against leaving the shop's three term loans exactly as they stand, by the monthly repayment and by the total repaid.
| Option | Monthly repayment | Versus $18,237 now | Total to repay | Change in total |
|---|---|---|---|---|
| Leave all three loans alone Today | $18,237 | Starting point | $587k | Starting point |
| Reprice the business purchase loan alone | $18,056 | $181 less | $578k | $9k less |
| One loan for all three, 48 months | $12,201 | $6,036 less | $586k | $1k less |
| One loan for all three, 7 years | $7,839 | $10,398 less | $658k | $71k more |
| One loan for all three, secured by the home | $3,342 | $14,895 less | $1,003k | $416k more |
Rounded and illustrative. Every rate here is assumed so the sums can be shown; none is a quote or a rate on offer. The overdraft is unchanged in each option and costs about $1,008 a month in interest. Payout and valuation costs are not included, nor the establishment fee, the new lender's charge for opening its loan.
One 48-month loan takes about $6,036 off the monthly repayment and leaves the total within $1k of today. That is because the loan for the seasonal order, due in eight months, and the loan on the cool room are stretched to four years. At seven years the repayment is $7,839 and the total rises by about $71k. Secured by the home over 25 years, the repayment is $3,342 and the total rises by about $416k.
The longer options also outlast what the loans bought. Inside a 7-year loan, the cool room is still being repaid 54 months after its current loan would have finished. The Christmas order is repaid over 84 months instead of 8. The right option for the shop turns on its takings, how long the lease runs and how old the refrigeration is, and the owners make that call.
Our approach: we would line up every payout figure, the sum that would clear each loan on the day, and weigh the options on both measures. The owners' choice would then go to lenders whose policy fits a leased liquor store. Every figure here is illustrative, not an offer or an approval.
Security for the refinanced loan
Each lender being paid out holds something of the store's as security, from the fridges to the house, and a refinance releases those holds while the new lender takes its own.
- The refrigeration. Paying out the cool room finance releases the old financier's hold on the fridges and compressors. The new lender then takes its security over them.
- A general security agreement. It sits on the PPSR, the national register of security interests in personal property. It does not cover land, buildings or fixtures to land. When the loan changes lenders, the outgoing registration should be removed and the new one added. It helps to ask for confirmation of each removal at payout.
- The home. Borrowing against the house usually comes cheaper and runs longer than business lending. In the option secured by the home, the house is pledged for everything the store owes on those three loans. If the house was pledged when the shop was bought, a refinance can weigh up freeing it once the takings show they can carry the purchase loan unaided. The mortgage on the house has its own page: home loans for business owners.
Two stores, or a store and a property trust
Some owners run a second store, or hold the shop's building away from the trading business. When each store has its own company, or a family trust holds the freehold and rents it to the trading company, a lender assesses all of the entities and guarantors together.
Before you apply to refinance the store
A bottle shop's year builds to its Christmas peak, and that rhythm shapes what its statements show.
What to line up, and when to look again
A few items decide whether now suits the store, or whether a later date costs less.
- Payout figures. It helps to get every payout amount in writing. On a fixed-rate loan for the cool room, it also helps to ask what the break cost is. A break cost is a fee for ending a fixed rate early. The more rates have fallen since the rate was fixed, the bigger it is. If leaving costs more than it saves, the refinance can be looked at again closer to that loan's end date.
- A full trading cycle. After a slow stretch, statements that run through the next peak show the store's whole year.
- Up-to-date lodgements. The store's lodged BAS, the business activity statements that report GST to the ATO, and its tax returns go in with the application, alongside its ATO account. It helps to get any overdue lodgement in before applying.
Both the loan that bought the store and its stock overdraft can carry a review in their terms. At that point the lender can look at how the store has been trading and whether the liquor licence is still current. It will see the overdraft climb before Christmas and come back down once the stock sells. Getting ready early also leaves time to compare other lenders, and our annual review guide covers the steps.
Card takings, stock and wages in the store's records
Card takings land in the account every day, which leaves a clear record of the store's trade.
The daily card settlements in the bank statements can be read against the BAS. Together they show the size of the takings, how steady they stay across the year, and how much the store's costs take.
- Gross margin. Sales less cost of sales is what remains for wages, rent and loan repayments.
- Stock on hand. The year-end stocktake beside the amount owed to suppliers shows how much of the stock the store has paid for.
- Wages. An independent bottle shop pays its staff under the General Retail Industry Award. One run by a hotel falls under the Hospitality Award, as Fair Work sets out.
Paperwork for the application
Much of this already sits in the store's records, its merchant statements and the banner group agreement. An aged list of what is owed to suppliers sorts each unpaid invoice by how long it has been outstanding.
- Payout letters for each loan, the overdraft limit and balance, and an ATO statement of account if a plan is running
- Statements for every business account, plus merchant statements for the card terminals
- This year's BAS and two lodged years of financial statements and tax returns
- The latest stocktake and an aged list of what is owed to suppliers
- The lease with its expiry, options and make-good clause, or the title if you own the shop
- The liquor licence and its conditions, and the banner group agreement
- Invoices for the cool room and fridges showing when they were bought
- Personal debts of every owner and guarantor: statements for the mortgage, any car finance and each credit card
Bottle shop refinance questions
Can I refinance the loan I bought the store with and leave the cool room finance alone?
You can, subject to the lender. Each one can move separately. A loan on the cool room in its last few months carries little interest still to pay. Letting it finish while the rest is refinanced can cost less.
My overdraft sits near its limit before Christmas. Will a lender count that against me?
Not necessarily. Twelve months of statements show the overdraft rising before the peak and falling once the stock sells. That pattern shows the limit being used for what it is for.
Does our banner group agreement matter when we refinance?
It can. It sets the store's supply terms and promotions, which shape the store's margin. It helps to send the agreement with its term and fees. It helps to raise any planned change of banner early, since it would change the supply terms behind that margin.
Can the liquor licence be used as security for the new loan?
That depends on the lender. The licence is part of the business it belongs to. It helps to have the licence number, its conditions and trading hours, and the licensee's name ready.
I'm looking at a second store. Does refinancing now help or get in the way?
The two can be planned as one. The second store brings its own trading figures, licence and lease to the application. In NSW the licence passes to the new owner through a transfer application to Liquor & Gaming NSW, with the store able to keep trading while it is assessed. Mentioning the purchase at the outset lets the refinance leave room for it.
The cool room compressor has just failed. Can we fund the new one in the refinance?
Subject to the lender, you can. The refinance can clear the existing equipment loan and fund the new compressor or cool room in the same loan. It helps to bring the supplier's quote, so the term can be set against the new equipment.
Will applying to refinance show up on my credit file?
Yes. Each formal application is listed on the credit files of the company and its directors. Fewer listings land when the application goes only to lenders whose policy already suits a bottle shop.
We took over the store two years ago. Is that enough trading history to refinance?
It can be. Lenders differ on how much history they need, and two lodged years with current BAS show the store's figures under your ownership.
A large liquor chain opened nearby and our sales dipped. Does that count against the store?
Not necessarily. Statements and BAS that show trade levelling out after the opening, with the margin holding, set out the store's current figures.
My partner guarantees the purchase loan. Do they need to sign the refinance?
Every guarantor of the new loan signs it. The refinance can also consider whether a guarantee is still needed once the store's trading supports the loan.
Talk to us about your bottle shop's loans
A bottle shop's loans each paid for something different: the business, the stock that fills the shelves and the refrigeration that keeps it cold. Refinancing them well means lining each loan up with what it bought, the lease the store trades under and the card takings that cover the debits. Ardent Capital Group can assist bottle shop owners with refinancing purchase loans and equipment loans, and with stock funding through working capital and overdrafts. We can arrange the finance for each of the store's loans, and your accountant handles the tax side. Whenever the purchase loan, the cool room finance or the stock overdraft starts to pinch, we would be glad to sit with you over the shop's debts.
