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How to Successfully Secure a Loan For Your Brewery
October 18, 2021
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How to Successfully Secure a Loan For Your Brewery

As a craft brewery owner, you’re tasked with providing customers with a variety of beer options, helpful customer service, and an overall pleasing experience.

Still, even if you’ve mastered these elements, there’s always room for improvement. That’s why pursuing a loan for your brewery can be a beneficial move!

Using a small business loan, you can grow your brewery into a larger operation. There are numerous ways to do this, so you’ll need to determine your brewery’s existing challenges and goals.

In this post, we’ll provide five suggestions for how you can utilize a loan to improve your brewery. Every business is different, but we’re confident that at least one of these investments could benefit your brewery.

Top Brewery Finance Options:

Before you apply for additional financing, you should consider your business’s current situation. Do you have a good credit score, or are you working to improve your score and overall financial habits? Are you a new business owner, or perhaps you have a long business history?

By answering these questions and reviewing the information below, you can select a loan option that’s right for your brewery.

Term Loan

When you apply for a small business loan from an alternative lender or bank, you’ll receive a lump sum with a set term. You’ll need to repay your loan within this period.

Small Business Administration (SBA) Loan

The SBA provides financing to businesses that can’t otherwise qualify for a loan. So, if you’ve applied for traditional finance options but couldn’t qualify, an SBA loan might be your best bet.

Line of Credit

With a business line of credit, the lender will provide you with a limit that you can spend up to. If your credit line is revolving, you’ll be able to borrow more money once you pay off your balance. In comparison, with a non-revolving credit line, you’ll need to apply again.

Business Credit Cards

Many craft brewers apply for a credit card so that they can make purchases without having cash on-hand. Of course, it’s crucial that you’re responsible with your card because it can be easy to accumulate debt.

Equipment Financing

To purchase necessary brewery equipment, you might want to consider an equipment loan. This financing must be used for equipment purchases, though, so keep this in mind if you have other financing needs.
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4 Ways to Use a Brewery Business Loan:

1. Offer a Larger Craft Beer Menu

Most breweries start out by offering a few types of beers that they can perfect.

Once your brewery masters a few different types of beers, you should start considering new options that you can add to your menu. Using your loan, you can pay for ingredients, and make sure that your newest additions are the right fit for your brewery.

Another way to utilize your loan is to start serving food at your brewery. More and more breweries are offering food at their establishments to attract more customers, and if you start doing this, you could attract an even larger demographic to your establishment.

2. Improve Your Marketing Strategy

There are over 6,000 of breweries in the U.S., and competition is constantly increasing. Due to this, creating an effective marketing strategy is important for developing a loyal customer base.

With your brewery business loan, you can hire associates to handle tasks such as:

  • Managing your business’s marketing efforts
  • Paying for sponsored social media posts to attract your ideal customer base
  • Investing in updated signage to display near your brewery.

Once you’ve tried a few different marketing strategies, track the results to determine which campaigns are generating the most sales. Once you do that, you can determine which projects you should continue to invest money in.

3. Hire More Employees

If you’d like to improve your brewery’s operations, you should consider hiring additional employees. With your loan, you can pay for onboarding and hiring costs, so you can hire experienced professionals. These individuals can handle tasks such as:

  • Giving brewery tours
  • Assist customers
  • Make inventory orders
  • Handle other administrative tasks

If you’re currently understaffed, hiring more employees will enable you to improve your overall operations.

4. Expand Your Business

If your brewery is generating significant sales, it may be time to expand your existing location or open another one.

With your additional working capital, you can afford expansion costs such as:

  • Purchasing more land to build another location
  • Investing in storage space
  • Paying for a new lease on a larger real estate space

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Conclusion: Invest in Your Brewery with Additional Financing

Now that you’ve learned about how you can utilize a small business loan to improve your brewery or distillery, it’s time to decide how you’ll spend your additional financing.

It’s important to review your business plan and consider your business’s biggest struggles. For instance, if you’re understaffed, you should use your loan for hiring. Or, if your business has grown significantly and you’ve outgrown your brewery’s location, it might be time to expand your space or offer additional craft beverages.

Ultimately, you should remember that every business owner is different. Therefore, you should use the proceeds from your loan to make enhancements that make sense for your brewery!

Editor’s Note: This post was updated for accuracy and comprehensiveness in October 2021.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].