Brewery Equipment Financing for Small and Craft Breweries

Financing your brewery equipment can be a daunting task, but it doesn't have to be. Many small and craft breweries struggle to secure funding, but there are options available.

The average cost of brewery equipment can range from $50,000 to over $1 million, depending on the size and type of brewery. This can be a significant financial burden.

Many breweries opt for financing options that allow them to spread the cost over several years. This can help to reduce the initial outlay and make the equipment more affordable.

A typical brewery equipment loan can have a repayment period of 5-7 years, with interest rates ranging from 6-12%.

Related reading: Brewery Date

Craft breweries have a unique set of equipment and financing needs that fall outside traditional loan programs.

To access capital, breweries can explore alternative financing options, such as equipment leasing or financing.

Breweries can also consider SBA loans, which offer more favorable terms and lower interest rates.

However, SBA loans require top qualifications, including great credit, substantial revenue, and at least a few years in business.

If you're a small brewery looking to get started, you may want to consider brewery equipment financing, which allows you to purchase equipment and pay for it over time.

With equipment financing, the brewery equipment serves as the collateral for the loan.

Breweries that don't have other assets to use as collateral can still get working capital under this arrangement.

But, if you default on the loan, you could end up losing your brewery equipment.

Here are some popular options for brewery financing:

Each of these options has its pros and cons, and the right choice will depend on your specific needs and qualifications.

Leasing brewery equipment can be a cost-effective option for craft breweries. Leasing allows breweries to obtain the equipment they need at affordable monthly installments, retain control of the equipment, and generally take ownership after the lease ends.

Equipment leasing can provide tax breaks, depending on the structure of the lease. You can check with the equipment manufacturer to learn if it offers leasing, either itself or through a partner, or work with a company that will help you find a lease through a third-party leasing company.

Some lenders offer equipment leasing options that allow breweries to lease equipment for a set period of time, typically 2-5 years, with the option to purchase the equipment at the end of the lease. This can be a good option for breweries that need to upgrade or replace equipment regularly.

Here are some common types of leasing options:

It's essential to carefully evaluate each leasing option and understand the terms and conditions, interest rates, and payment schedules before making a decision.

Business credit cards can be a great way to finance small expenses and build credit for your brewery. Many major card issuers offer business credit cards with rewards and benefits tailored to the needs of small businesses.

Recommended read: Startup Business Credit Cards No Personal Guarantee

You can't get a business credit card at all if your brewery business is not set up properly. This means you need to have proper licensing, incorporation, and more.

Improving your brewery's Fundability is the first step to building business credit. This can also help you get other types of funding in the future.

The best use for credit is to pay for smaller day-to-day expenses of your brewery, such as computers, phones, thermometers, gloves, and other essential items. Pay the bill on time, and your small business credit scores will rise.

Leasing and funding options can be a crucial part of starting or growing a craft brewery. You can lease equipment to get what you need without a significant cash outlay, and leasing may provide tax breaks as well. This can be a good option for breweries that need specialized equipment but can't afford to buy it outright.

There are various financing options available for craft breweries, including bank loans, alternative lending, and SBA loans. These options can provide the capital you need to start or expand your operations, but they often require a solid FICO score, a detailed business plan, and collateral to secure the loan.

Equipment leasing can be a good choice for small brewery finance, allowing you to finance the purchase of equipment like a car loan. This type of financing allows you to purchase equipment and pay for it over time, rather than having to pay for it all upfront. The brewery equipment serves as the collateral for the brewery loan.

Some SBA preferred lenders specialize in lending to the craft brewing industry, offering terms out to 10 years for non-real estate financing and out to 25 years if the loan includes the acquisition of real estate to house the brewery. Tenant improvements, equipment, and inventory can all be financed through an SBA 7a loan.

Here are some of the most common leasing and funding options for craft breweries:

These options can help you access the capital you need to start or grow your craft brewery, but it's essential to carefully evaluate each option and consider factors such as use-case, flexibility, speed, cost, and your business's qualifications.

Exploring business funding options can be a daunting task, especially for breweries. Financing for new breweries can be a costly endeavor, and securing financing is an important step in the process. It's essential to understand the terms and conditions, interest rates, and make sure you're able to make the payments on time.

Each financing option comes with its own set of pros and cons, and it's vital to carefully evaluate each one before making a decision. Taking on debt can be risky, and it's essential to consider the potential impact it may have on the business's cash flow and overall financial stability in the long run.

Brewery equipment financing can be a good choice for small breweries, allowing you to finance the purchase of equipment, like with a car loan. This type of financing allows you to purchase equipment and pay for it over time, rather than having to pay for it all upfront.

Some financing options include bank loans, which can provide breweries with the capital they need to start or expand their operations. However, banks typically require a solid FICO score, a detailed business plan, and financial projections, as well as collateral to secure the loan.

Alternative lending options, such as online lending platforms and peer-to-peer lending, may offer more flexible loan terms and faster approval times, but they may also come with higher interest rates.

Here are some options to consider:

It's essential 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.

Starting a brewery can be a costly endeavor, and securing financing is an important step in the process.

Each financing option comes with its own set of pros and cons, and it's essential to carefully evaluate each one before making a decision.

It's vital to understand the terms and conditions, interest rates, and make sure you're able to make the payments on time.

Taking on debt can be risky, and it's essential to consider the potential impact it may have on the business's cash flow and overall financial stability in the long run.

The only good financing is the financing you can actually get, so it's essential to focus on realistic options.

There are choices out there that don't involve bootstrapping your brewing business or pinning all your hopes on crowdfunding.

Corporate credit can help your brewery get financing in the future, long after you've fulfilled your first need for financing.

Demand for great craft beer is huge, but the industry has seen recent high-profile closures and consolidations due to market saturation and under-capitalization.

By financing strategically, you can increase the chance that your craft brewery can become profitable and grow.

A wide range of alternative financing options are available for start-up craft breweries and growing breweries, catering to their unique equipment and financing needs.

You can finance brewery equipment through various options, including rental programs and leasing. Red Windows Capital offers a rental program that allows you to "rent" equipment, making it an operating expense and keeping it off your balance sheet.

Equipment leasing can provide tax breaks, depending on the structure of the lease. You can check with the equipment manufacturer to learn if it offers leasing options.

Brewery equipment financing can be a good choice for small breweries, allowing you to finance the purchase of equipment over time. This type of financing allows you to purchase equipment and pay for it over time, rather than paying for it all upfront.

There are alternative financing options available for breweries, including unsecured business lines of credit. These lines of credit can provide a reliable source of working capital for small purchases, without requiring collateral.

If you're unsure of how much any loan will cost your business, you can use a business loan calculator to estimate your payments and the total cost of debt.

Consider reading: Venture Capital Finance

Here are some key factors to consider when choosing a brewery equipment financing option: