What Can You Do With a Craft Brewery Business Loan?

by | Dec 28, 2021 | Equipment Financing | 0 comments

The craft brewery business is rapidly increasing in popularity, and in 2022, it is poised to grow beyond even what we’ve seen thus far. For those looking to get into the craft brewery business or those looking to expand their current company, a craft brewery business loan may be exactly what you need to get things going and ultimately be competitive in what is becoming a relatively crowded market.

In this article, we address the different types of craft brewery loans available and the potential uses for loan funds. After all, getting approved for the loan is only half the battle; what are the best ways to allocate the loan proceeds to get the most significant ROI and move your craft brewery forward?

Types of Craft Brewery Business Loans

If you have thought about getting a loan for your brewery business, you might be wondering what the best type of business loan is. Do you go for a short-term loan, or how about a line of credit? The kind of craft brewery loan you get will largely depend on your business’s needs as well as your company profile.

Short-term loan

With a short-term loan, the lender will give you a lump sum that you pay back over a specified time; generally, this timeframe will be anywhere from six to 18 months—though in some cases, it can be longer. With this type of craft brewery business loan, the interest rate is slightly higher, but you are paying it off over a shorter period.

Invoice financing

The key to getting this kind of loan is having a fair amount of invoices due to invoicing financing. So let’s say you have several big orders out to bars or restaurants and are slow in paying for whatever reason. You can, in essence, sell these invoices to a lender or factor and receive the money now rather than later. Depending on the loan structure, it may be up to the lender to collect on the invoices, or you have to collect and thus pay back the money advanced to your brewery.

Line of credit

When it comes to craft brewery business loans, lines of credit are a popular option. They can be easier to get approved for, and the good thing is you only pay interest on what you take out—not on the entire line. Also, once you repay the amount withdrawn, it is there for you to use again with a line of credit.

Equipment loan

Breweries primarily rely on some significant pieces of equipment to generate their product. This is where an equipment loan could be the ideal financing solution. The equipment purchased stands as the collateral on a loan. This makes it easier to qualify for an equipment loan.

Uses for a Craft Brewery Business Loan

So once you do procure funding from an online or alternative lender, what? What do you do with the money from that loan to get the most bang for your buck and thus really help your craft brewery flourish and grow? Below are a few ideas that could go a long way toward moving your business forward.

1) Enhance your brewery’s marketing

This is becoming a relatively crowded field, so effectively marketing your craft brewery is critical. Getting a loan to help boost your marketing strategy can benefit your company over the long term. You might, for example, go so far as to rebrand and change your packaging to reflect a new modern vibe. You could launch a comprehensive social media influencer campaign. Get creative with your marketing efforts, and it will pay off.

2) Hire on more staff

As your craft brewery grows, you need to keep pace with this growth; the one sure way to do this is by hiring more people. People to market your brand, people to give tours of the brewery, people to run the tasting rooms, people to handle packaging and shipping. These are all roles which a business loan can help you fill.

3) Expand your beer line

As you grow and people recognize who you are, it is time to expand your product offerings. Perhaps you got started by creating a few fantastic craft brews. Introducing new beer, however, is not a cheap endeavor. Developing, testing, packaging, and marketing a new product can be pretty costly, and this is where a craft brewery loan can make a huge difference.

First Union Lending Is Here to Help!

We’ve worked with numerous craft breweries throughout the US. With SBA loans, lines of credit and short-term loans among other products, we have a financing solution that will work perfectly for your brewery. Call today and let’s get started! 

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Only U.S.-Based Businesses are Eligible