How to Find Funding for a New Brewery (Part 4)

Now that you’ve got a sources and uses schedule, financial pro forma and a business plan, it’s time to go raise money for your brewery.

Below is a listing of common (and not-so-common) funding options:

  • SBA loans
    • Depending on your situation, this may be your best bet…connect with Scott Birkner at Dogwood State Bank, sbirkner@dsbnc.com.
    • You can learn more about SBA loans and find a brewery lender in this podcast.
  • Traditional business loans
    • These require a strong credit history and good adherence to the “5 C’s”
    • Character, capacity, capital, collateral, and conditions
  • Personal savings, family and friends
    • The usual starting point for funding a brewery.
    • Don’t forget your friend’s friends. Maybe one of them knows Kevin Bacon.
  • Strategic partnerships
    • You may be renting space, maybe the landlord wants to own a piece of the brewery?
    • This could be a solid way to raise equity and get a deal on rent.
  • Crowdfunding and grants
    • The money is out there, you just need to go get it.
    • Check out this podcast with Tranice Watts for inspiration.
  • Supplier and vendor financing
    • Brewery equipment companies may have their own financing arm.
    • They’ll secure the equipment as collateral, likely take a down payment, and you’re off and running.
  • Angel investors and venture capitalists
    • The current climate is tough to get money from these folks, but it can be done.
    • Make sure your financials projections are solid, you have a decent valuation estimate, and a good understanding of EBITDA.
  • Business incubators and business competitions
    • These programs may provide funding, mentors or other resources to startups in exchange for equity.
    • Business plan competitions or other challenges may provide cash prizes or investments from the sponsoring group.

The bottom line with brewery funding: The capital raise to start your brewery may come from a lot of different places.

Funding your brewery isn’t easy, but with hard work, time, patience, and the four steps below, you can do it:

  1. Create a sources and uses schedule
  2. Build the financial pro forma
  3. Write your business plan
  4. Review the list of common (and not-so-common) funding sources, and get to work!

P.S. Learn more about the network of beer industry financial professionals: the Beer Business Finance Association. We talk about brewery loans, funding, and cash flow all the time!

 

Categories:

Tags:

Comments are closed