This guide from Blackvale Business Funding in Bay City, Michigan summarizes what restaurant and bar owners can find from the Michigan Liquor Control Commission before applying or buying. The Commission decides every application; confirm current rules and fees with it.
Michigan Liquor License Lookup: Checking a License Before Buying a Bar
Before buying a bar or a restaurant with a license, check the license itself. The MLCC offers an Active or Escrowed License Query that shows the licenses and permits a business holds, and it publishes a licensing list of active, conditional and escrowed licenses by county and local unit. The Commission notes that its list data changes as licenses transfer.
Match the business name, the address and the license type on the record to what the seller says is being sold.
The same query shows the license holder's violation history and its liquor liability insurance carrier, according to the Commission. A buyer can read a long violation record as a warning about how the bar has been run, and a lender reviewing the purchase may ask about it too. Ask the seller to explain anything on the record before signing a letter of intent.
The Michigan Liquor License Application and Where It Sits in a Funding Timeline
A new license or a transfer goes through the Commission, and local approval can be part of the process. The timing matters for funding: a lender financing a bar purchase may make the license transfer a condition of closing, and a restaurant adding alcohol sales may not see that revenue until the license is issued.
Build the license timeline into the closing date and the cash plan, so payroll and rent are covered if approval takes longer than hoped.
Michigan Liquor License Types: Class C, Tavern, SDM and SDD
The Commission's retailer licensing information describes the main retail types. A Class C license allows beer, wine, mixed spirit drinks and spirits to be sold for consumption on the premises; a tavern license covers beer, wine and mixed spirit drinks on the premises. For off-premises sales, a Specially Designated Merchant (SDM) license covers beer and wine, and a Specially Designated Distributor (SDD) license covers spirits.
Michigan limits the number of some licenses by population in each local unit, including SDM licenses, with exceptions set in state law. Ask the Commission which types are available for a given address.
Michigan Liquor License Requirements a Restaurant Owner Confirms With the Commission
Requirements depend on the license type, the location and whether the license is new or a transfer. Common topics include the premises, the owners and their backgrounds, financing of the purchase and liquor liability insurance. The Commission's licensing division answers questions by phone and email.
This page does not restate legal requirements; confirm each one with the Commission or a lawyer.
Michigan Liquor License Status: Active, Escrowed and Pending Transfers
A license can be active, escrowed or in the middle of a transfer. An escrowed license is one held with the Commission while not in use, for example after a business closes; buyers sometimes buy escrowed licenses to open at a new location. A pending transfer means the sale is waiting for approval.
Lenders want to know which status applies, because a license that cannot be used affects the business's income.
- Confirm the license status and type through the Commission's query.
- Ask the seller for the license history and any pending matters.
- Get a quote for liquor liability insurance before closing.
- Price the equipment and stock the bar will need on day one.
- Set a closing date that leaves room for the transfer review.
Paying for Coolers, Draft Lines and Opening Stock Around a License in Bay City, MI
The money around a license usually goes to fixtures, coolers, draft lines, a bar build-out and an opening stock order. Coolers and draft systems fit equipment financing; a bar build-out fits a commercial term loan; the opening order fits an inventory loan or a line.
Illustration only, invented figures: a Bay City, MI restaurant adds a bar with an invented $24,000 of coolers, draft lines and glassware, financed at an invented annual rate of 10.5% over 48 months; the payment is about $614 a month (our arithmetic). Bar business loans and restaurant loans cover more.
By Blackvale Business Funding · Updated