When it comes down to it, breweries are capital-intensive businesses. Considering the costs associated with equipment such as fermentation tanks, mashers, and brewing kettles, as well as the cost of renting or buying your brewing space, and more—most brewers will need to apply for a business loan at some point during the life of their brewery.
Here, we’ll walk you through everything you need to know about financing for breweries—including where to find the best startup brewery loans, as well as the best brewery equipment financing. We’ll also explain how to qualify for financing and answer some frequently asked questions.
In this guide, you’ll find:
While there is no single type of loan designated for breweries, many local and national banks are hesitant to lend to businesses in the food and beverage industry because of the inherent risk associated with them. Therefore, many breweries will have to explore alternative options to access the capital they need. And if you’re looking for a brewery startup loan, you’ll have to be even more creative—as many lenders have a minimum “time in business” requirement.
As you compare your options, therefore, it’s important to understand that the right loan will largely vary based on what you need the loan for, in addition to what kind of financing you can qualify for (more on these points below).
With all of this in mind, let’s review some of the best options for brewery financing.
For most types of businesses, an SBA loan is the best kind of loan you can get. With long terms, high capital amounts, and low interest rates, SBA loans are ideal for meeting a wide range of business purposes.
However, SBA loans also require top qualifications—including great credit, substantial revenue, and at least a few years in business (although microloans are more flexible). Additionally, SBA loans are traditionally slower to fund and require extensive documentation in order to apply.
If you think you may be able to qualify (or just want to learn about these products), there are three types of SBA loans that might be well-suited for your capital needs:
If you think any of these types of SBA loans is right for your brewery financing, you’ll need to find a participating SBA lender to submit your application.
Generally, many local and national banks offer SBA loans, so you might start your search with a bank that you already have a relationship with. Alternatively, you might consider some of the top SBA lenders, including:
Use our guide to learn more about the top SBA lenders.
Whether you don’t think you can qualify for an SBA loan, or you simply want a faster, more specialized form of financing, there are a variety of top options available for brewery equipment financing.
In general, equipment financing is a great option for brewery loans as some of the biggest costs associated with starting and running a brewery are equipment-related. Plus, whereas SBA loans typically require top qualifications and are slow to fund, equipment financing is much more flexible.
Although you can access equipment financing from banks, alternative lenders also offer this type of financing with limited documentation requirements and funding as fast as a few days. In addition, regardless of where you apply for brewery equipment financing, you’ll find that lenders may be willing to work with you even if you’re a startup or have bad credit.
In short, this is the case because equipment financing is self-collateralizing—in other words, the equipment that you’re purchasing serves as collateral on the loan—meaning if you were to default on the loan, the lender would be able to reclaim the equipment to cover their losses.
Therefore, with the self-collateralizing nature of this type of financing, there are many more options available for startup brewery equipment financing, as well as brewery equipment leasing.
When it comes down to it, there are a variety of alternative lenders that offer both brewery equipment financing and brewery equipment leasing. If you need a place to start, you’ll want to consider these top options:
|Interest Rates and Terms
Up to $1 million
Starting at around 10%; up to five years
“Decent” credit score; at least one year in business; $100,000 annual revenue
Best for brewery equipment leasing that’s fast to fund
Up to $2 million
Start as low as 6%; up to seven years
620 minimum credit score; $120,000 annual revenue
Best for startup brewery equipment financing; larger equipment purchases
Up to $500,000
As low as 5%; two to seven years
650 minimum credit score; at least two years in business
Best for highly qualified brewery owners and low interest rates
Up to $500,000
As low as 5.49%; six months to six years
620 minimum credit score
Up to $500,000
6% to 35%; two to five years
Credit score above 600 preferred
Best for startup brewery equipment financing or leasing; business owners with lower credit scores
Use our guide to learn more about some of the best equipment financing companies.
At this point, you might be wondering how to qualify for brewery financing. When it comes down to it, many of the requirements that you’ll need to meet in order to qualify for a brewery loan will vary based on the type of loan and the lender you’re working with.
For example, SBA loans will require much higher qualifications in comparison to brewery equipment financing. Similarly, products like equipment financing, business lines of credit, and short-term loans will be much more accessible as brewery startup loans compared to SBA or bank loans.
This being said, to qualify for most types of brewery financing, you’ll want to have:
However, if you’re just starting your brewery or have a lower credit score, you’ll find that some alternative lenders will be willing to work with you—although you may face higher rates. In particular, you’ll find that brewery equipment financing or leasing is available from some online lenders regardless of your time in business—again, due to the self-collateralizing nature of that type of financing.
Similarly, certain short-term lenders and business line of credit providers are also willing to work with startups, or businesses with less-than-average credit.
Ultimately, with the variety in business loan requirements for the different types of brewery loans, you’ll want to evaluate your individual business before deciding which loan type and lender is right for you.
Once you’ve evaluated your business, however, you’ll be ready to start the application process. Again, to some extent, the process of applying for brewery financing will depend on the type of product and the lender you’re working with.
In general, however, you can expect to gather information and documentation including:
Additionally, if you’re applying for brewery equipment financing or leasing, you’ll likely need to provide information regarding the equipment you’re looking to purchase (or lease)—including a quote for the price, a description of the equipment, the condition of the equipment, etc.
Along these lines, if you’re applying for a brewery startup loan and you don’t have a history of business revenue, you’ll want to provide a thorough business plan for funding that includes financial projections.
If you go with an alternative lender, they will have simpler, more streamlined application processes that are usually online-based. Many of these lenders will allow you to complete an application in only minutes with minimal documentation requirements. With bank or SBA lenders, on the other hand, you’ll find more manual processes, as well as more forms, documentation, and information.
After you’ve submitted your business loan application, you’ll want to answer any follow-up questions or requests the lender has as quickly and completely as possible—doing so will help speed up your funding timeline.
At the end of the day, from brewery equipment financing from alternative lenders to SBA microloans for brewery startup loans, there are a variety of options out there to help you access capital for your craft brewery.
Ultimately, though, it’s up to you to decide what type of financing is best for your needs. As you explore different solutions, you’ll want to think about factors such as use-case, flexibility, speed, cost, and, of course, your business’s qualifications, to determine what type of brewery loan is right for your business.
To this point, however, you’ll also want to remember that the best type of craft brewery loan is not only the one that you qualify for, but the one that’s most affordable for your business.
Therefore, if you’re unsure of how much any loan will cost your business, you can use our business loan calculators to estimate your payments and the total cost of debt.
Randa Kriss is a senior staff writer at Fundera.
At Fundera, Randa specializes in reviewing small business products, software, and services. Randa has written hundreds of reviews across a wide swath of business topics including ecommerce, merchant services, accounting, credit cards, bank accounts, loan products, and payroll and human resources solutions.