Brewery Loan Overview: Funding options to grow your craft brewery

Owning a craft brewery takes a lot of work. This includes making the customers satisfied with the service, providing a lot of beer options, and offering an overall pleasant time in your place. Even if you mastered all of that, there are always things you can proactively improve, but most of them cost money.

If you’re starting your craft brewery and are in dire need of money to expand or improve your business, you can research for an online installment loan. There are many loans out there that can help you finance your operations. However, the question persists. Which of these loans can help your business?

In this article, we’re here to provide you different financing options for your craft brewery. Once you take your pick, you have to find the right lender to borrow money from, which is relatively easy, depending on some factors. With no further ado, here are financing options you can try out to expand your craft brewery.

SBA loans

SBA loans or Small Business Administration loans are probably the cheapest financing option for first-time business owners, especially for people with small businesses. This is because most of the loan is funded by the administration. Thus, banks and alternative lenders assume fewer risks.

However, all banks and lenders alike have to follow stringent rules and requirements and the Standard Operating Procedure for the loan, including the limit and repayment.

One of SBA’s most popular loan products is the 7(a) loan, commonly used to fund daily operations, purchase new products, and refinance other loans with higher interest. 

Also, there is no loan out there that is less expensive than the 7(a) loan, which is excellent if you want to fund your daily operations and keep the costs down. Not only that, SBA loans are the go-to loan if you want to expand your business least expensively. It is also one of the fastest applications out there, with only at least seven days before getting the approval.

Term loans

If you only need a loan that will finance a one-time purchase, you might want to consider looking for term loans. This is arguably one of the most straightforward loans out there, with only 1-5 years of repayment. You can use this loan for any purchase, and the borrowing limit and interest vary per lender. 

If you have an average revenue and excellent creditworthiness, you can borrow up to $500,000. Also, there are lenders out there that will let you decide when the repayment will occur, whether it is daily, weekly, or monthly. Term loans also have the fastest applications out there, with only three days to get the approval.

LOC

If you aren’t sure how much money you want to borrow for your business, you can try out LOC. With LOC financing, lenders will let you borrow money whenever you want and how much you want, although they will limit how much money you can borrow. 

If your credit line is revolving, you can continue borrowing money as long as you have paid your balance. Compared with revolving credit, non-revolving credit lines are pretty much the same, although you will have to apply again for another loan after paying the previous one.

Revenue-based loan

Revenue-based loans can be the lifeline of your brewery if you use them right. This is especially true if you are looking to expand your business sometime soon. With an expanding business, you will need to have funding to purchase products or continue daily operations. 

You can do this with bank loans, but they are too time-intensive, not to mention finicky with the repayment terms and borrowing limit. Also, bank loans are harder to obtain nowadays and will sometimes make you wait months for approval.  That said, revenue-based loans are much better, less hassle, and a better financing option than bank loans.

MCA

If your creditworthiness is on the rocks and you’re having a hard time getting approved for business loans, then merchant cash advances might be able to help you with financing. MCA is a financing option that lets you borrow money depending on your business’ future sales revenue. 

In most cases, you can get approval as fast as a day, with repayment terms that can last for only months or at most, a year. You can also decide when you want to repay, whether it’s daily, weekly, or monthly. You can also talk to your lender about how much you will pay each time.

Takeaway

For an expanding craft brewery, having a financing option that is quick and easy is essential as daily operations can be costly, and purchasing equipment doesn’t come cheap. That said, researching financing options is essential if you are looking for money for your business. There are a lot out there, so it’s easy to find one. Finding the right lender, however, can be a bit tricky.

Tiffany Wagner often dabbles in business financing and fashion in her articles. Moreover, she is also knowledgeable about topics of real estate and health. In her free time, she is often seen playing board games and browsing her socials.