Retail, food and hospitality

Brewery, Winery and Distillery Financing

Craft breweries, wineries, cideries and distilleries are a fundable category. Equipment lenders finance the tanks and stills, SBA 7(a) and real estate lenders fund the taproom and the building, inventory lenders advance against aging stock, and lines carry hops, cans and barrels.

What lenders weigh in a breweries, wineries & distilleries file

  • The taproom or tasting room share of sales, because product sold over the producer's own bar earns far more than the same product sold through a distributor.
  • Licensing status, since every producer holds a federal permit from the Alcohol and Tobacco Tax and Trade Bureau and a state license, and a lender times the closing to them.
  • Barrels produced against brewhouse and cellar capacity, or the age and appraised value of spirits and wine in the warehouse, because unused tanks and unsold stock are debt without revenue.
  • The lease and the buildout, which for a brewery or distillery means drains, trench work, glycol, gas, power and ventilation the landlord must approve in writing.
  • Distributor agreements and each state's three-tier rules, since beer franchise laws in many states make a distributor contract hard to end once signed.
  • The brewer's or distiller's production experience and the owners' capital, because a lender will not fund the whole of a product that will not sell for years.

What gets funded

  • Equipment financing for brewhouses, tanks, stills and bottling lines: The brewhouse, fermenters, brite tanks, stills, presses, canning and bottling lines and keg fleets financed against the equipment itself, commonly with a down payment. The most available capital in the category because stainless steel holds value and can be moved.
  • SBA 7(a) loans for a taproom buildout, startup or expansion: One long-term loan for the buildout, the equipment and an opening budget, with the equity injection, the lease, the licenses and the production resume as the file. Lenders say yes because the category is eligible and the taproom's card record is easy to verify.
  • SBA 504 and commercial real estate loans for the building: An owner-occupied production building, rickhouse, estate or tasting room funded on the real estate, which then gives every other lender in the file collateral. Common for producers that started in leased space and buy once the taproom has two years of returns.
  • Inventory and barrel financing for aging spirits and wine: Asset-based lenders that specialize in alcohol advance a share of the appraised value of barreled spirits, cased goods and bulk wine on a revolving borrowing base. Lenders say yes because the stock holds or gains value as it ages and can be held under their control.
  • Lines of credit and receivables financing: Hops contracts, cans, grain, bottles, excise taxes and payroll carried on a line and repaid as taproom and distribution revenue arrives, or distributor receivables advanced by a factor for a producer that sells mostly outside its own bar.
  • Revenue-based financing and bank-statement loans: An operating taproom or tasting room advanced against its card settlements and deposits. Funds in days, costs the most, and is sized to a remittance the slowest month can carry.

Breweries, Wineries & Distilleries funding guides

How MercFinancial places breweries, wineries & distilleries requests

MercFinancial is a commercial funding brokerage in Houston, not a lender, and it does not have a brewery, winery or distillery program or a promise of approval. A request starts with the file: the federal and state licenses and where they stand, the taproom or tasting room numbers broken out from distribution, the equipment quotes and capacity plan, the inventory schedule and aging plan, the lease or deed, and the owners' experience, equity and credit. From there, the funding sources among MercFinancial's more than 160 whose credit policy allows alcohol production and the structure in question are identified, one file is placed with all of them, and the offers are compared.

Whether any product is available depends on the funding source, and when nothing fits yet, you are told that plainly along with what would change the answer. Stephanie, the lending assistant, pre-qualifies a request in a few minutes with a soft credit pull that does not affect your score, and a free call with a funding specialist is booked at the contact page.

Frequently asked questions

Can a brewery or distillery get a business loan?

Yes. Breweries, wineries and distilleries are eligible for SBA 7(a) loans, equipment lenders finance tanks and stills against the equipment, inventory lenders advance against aging spirits and wine, real estate lenders fund an owned building, and lines and revenue-based funders carry an operating taproom. Which of these is available depends on the producer's stage, its licenses, its numbers and the funding source's policy.

Are breweries, wineries and distilleries eligible for SBA loans?

Yes. Alcohol production is not on the SBA's list of ineligible businesses in 13 CFR 120.110, so 7(a) and 504 loans are available through any SBA lender whose own credit policy accepts the category. Expect the lender to want the federal permit from the Alcohol and Tobacco Tax and Trade Bureau and the state license, or their pending applications, a production resume, an equity injection and personal guaranties.

Can I finance brewing or distilling equipment?

Yes. Equipment lenders and lessors finance brewhouses, fermenters, brite tanks, stills, mash tuns, presses, chillers, canning and bottling lines and keg fleets against the equipment itself, commonly with a down payment and the owner's credit, on a manufacturer's quote. Manufacturer programs are common, used tanks from a reputable fabricator are often financeable, and whether new barrels count as equipment varies by lender.

How do distilleries finance whiskey that will not sell for years?

With inventory and barrel financing from asset-based lenders that specialize in aging spirits, which advance a share of the appraised value of barreled stock on a revolving borrowing base, plus the cash from unaged spirits, the tasting room, cocktails, tours and merchandise sold in the early years. A bank line underwrites a year at a time and is the wrong tool for a four-year aging plan.

Do I need my federal permit before I can get brewery financing?

Not to apply, but usually to close. Many lenders underwrite a file while the federal permit and the state license are pending and condition the closing or the equipment delivery on approval. Bring the applications and their dates. Ordering a brewhouse or filling barrels before the permit is in hand leaves the owner carrying inventory with no legal way to sell it.

Financing for this industry

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MercFinancial is a commercial funding brokerage, not a lender. Approval, loan amount, rate, term and funding are decided by the funding source on the strength of the file; nothing on this page is an offer or a commitment to lend.