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The Ultimate Guide to Brewery Loans
August 22, 2019
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The Ultimate Guide to Brewery Loans

As a craft brewery owner, your job is to provide customers with a variety of beer options, helpful customer service, and an overall pleasing experience. Still, even if you’ve mastered these crucial elements, there’s always room for improvement. That’s why a small business loan can comes in handy!

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. For instance, are you earning more and more sales, but don’t have the manpower to serve all your customers? Or, are you interested in expanding your product options, but can’t afford it due to low cash flow?

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 prove to be extremely beneficial to 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? Are you a new business? Or perhaps you have a long business history?

By answering these questions and reviewing the information below, you can land on 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 time period.
  • Small Business Administration (SBA) Loan: The SBA provides financing to small businesses that can’t otherwise qualify for a loan. So, if you’ve applied for traditional finance options but weren’t able to qualify, a SBA loan might be your best bet.
  • Line of Credit: With a 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 start over and 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 the equipment needed to run a brewery, 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 costs you’d like to use additional capital for.

Brewery-Business-Loan-In-Text

4 Ways to Use a Brewery Business Loan:

1. Offer a Larger Menu

Most breweries start out by offering a few types of beers that they can perfect and make their signature options. This is typically a safer bet for new breweries, rather than producing numerous average quality beers.

Once your brewery masters a few different types of beers, you should start considering how you can add new options 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. To do this, you could host an event in which loyal customers try new beers before they’re released. This will help ensure that you’re utilizing your loan properly, and that new craft beers will be purchased by your customers.

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 manage your business’s marketing efforts, pay for sponsored social media posts to attract your ideal customer base, and invest in updated signage to display near your brewery. Once you’ve tried a few different marketing strategies, you can track the results and determine which campaigns are generating the most sales. Although you’ll have a business loan, you should still try to make the most of your spending!

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 give brewery tours, help customers choose the beers they’d like to purchase, make inventory orders, and handle other tasks. If you’re currently understaffed, hiring more employees will enable you to improve your overall operations and ensure that your customers are being appropriately assisted.

4. Expand Your Business

If your brewery is generating significant sales, it’s a good indication that you could expand your existing location or open another one. With your additional working capital, you can purchase more land to build another location, invest in a storage space, or pay for a new lease on a larger space, just to name a few examples.

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, 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, and your employees are overworked, 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 look at real estate options for a larger one.

Ultimately, you should remember that every business is different, so use your loan to make enhancements that make sense for your brewery!

Editor’s Note: This post was updated for accuracy and comprehensiveness in August 2019.

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].