SBA 504 Loan Program Helps Amplify California’s Craft Brewing Economy, Spurring Millions in Growth

In 2018, the Brewing industry was estimated to have an economic impact of more than $26 billion across the country – and that was before a surge in 2020 that saw the industry balloon to $9.66 billion statewide. In San Diego County alone, craft brewing has an outstanding $1.1 billion in economic impact.

California was the birthplace of craft brewing and continues to be its focal point today. According to the Brewer’s Association, California was #1 in the United States in total craft breweries in 2021.

While the California craft brewery industry is clearly booming, brewery owners often struggle to find suitable financing options to meet their needs.

Fortunately, new, and established breweries alike are utilizing the SBA 504 loan program.

What is an SBA 504 Loan?

Overseen by the Small Business Administration (SBA) and administered by qualified financial institutions such as Financiamiento TMC, the SBA 504 loan differs from a conventional real estate loan in that it empowers entrepreneurs to secure owner-occupied commercial real estate while enjoying the benefits of below-market, long-term fixed interest rates.

SBA 504 loans require a minimum down payment of only 10 percent and are fully amortized over 25 years with no balloon payment.

For over 40 years, TMC Financing has helped small businesses realize $10 billion in SBA 504 financing, creating more than 60,000 jobs across 6,000 companies. Many of those successes have involved craft brewery owners who stabilized their occupancy costs and amplified their business through property ownership.

Let’s take a look at some of the ways local breweries in California have benefitted from the SBA 504 loan program.

Four Sons Expands from a Hobby to a Diverse, Multi-State Enterprise

When Duke Dufresne started family-owned Four Sons Brewery, those four sons were already involved in their own careers in different industries. Duke expected the company would be a hobby. It took off and grew so fast within just six months that, soon, the whole family was involved.

Today, Four Sons enjoys multiple locations with about 25 employees throughout Southern California, Arizona, Colorado, Tennessee, and Guam. Attractive interest rates and the low down payment were both pivotal to Duke’s decision to use TMC Financing’s SBA 504 loan for several recent purchases.

Over the last five to seven years, industrial spaces Dufresne bought have steadily appreciated in value.

Bear Republic’s Brewmaster Continues its Growth with SBA 504 Program

República del oso CEO Richard Norgrove, also known as “the Brewmaster,” had great success with his first SBA 504 loan—and when it was time to do it all again, he knew he wanted to go to the experts at TMC.

With less than 20 percent down, Norgrove secured the long-term, fixed-rate 504 financing his company needed to continue fast-paced growth. With the right equipment and a hard liquor license, Rohnert Park Brew Pub dazzled its patrons with truly unique food and specialty drinks.

Bear Republic has won more than two dozen awards from the Great American Beer Festival, to say nothing of the growing collection of honors from other organizations nationwide.

Pond Farm Buys, Improves, and Expands its Property with $3+ Million in 504 Financing

Using an SBA 504 loan through TMC Financing, Pond Farm Brewing achieved a $1,768,000 purchase and $1,000,000 in tenant improvements and brewery equipment. Owner Trevor Martens secured a 15 percent down payment and a below-market, 20-year fixed rate.

Through this financing, Martens – an accomplished home brewer with nearly a decade’s experience – was able to leverage his hobbyist and corporate brewing experience to grow Pond Farm Brewing even faster than he and co-founder Stephanie, his partner, had believed possible.

Why Brewery Owners Choose SBA 504 Financing

Acquiring property with an SBA 504 loan is an accessible and affordable way for growing breweries to stabilize occupancy costs and solidify long-term financial security.

In addition to real estate, equipment purchases with a life expectancy of 10 years or more can also be financed through an SBA 504 loan. For many breweries, cost-effective equipment allows for optimal production and sets them apart from their competitors.

Comuníquese con Financiamiento de TMC to learn more about the SBA 504 loan program.