“If you would know the value of money, go and try to borrow some.” -Ben Franklin
Here are two financial tools that may be useful when making a decision about borrowing money for your brewery:
Financial pro forma
This tool answers the question: Will the cash flow of my business support the re-payment of this loan?
Debt service coverage and leverage ratios
This tool answers the question: What financial promises am I making to the bank, and what do I need to do in order to keep them?
Below is a short explainer video: How to use the financial pro forma and debt service/leverage ratios.
P.S. Learn more about the network of beer industry financial professionals: the Beer Business Finance Association. We talk about brewery debt, funding, and cash flow all the time!