Microbreweries have been on the rise over the past few years. As of last year, there were over 5,000 craft breweries in the United States and over $23 billion was spent on craft beer in the last year. To put that in perspective, five years ago there were only around 2,000 craft breweries in the U.S. This trend doesn’t show any signs of slowing down anytime soon. If you are a microbrewer who is leasing real estate space, now might be a good time to consider buying your own building using a Small Business Administration (SBA) 504 loan through TMC Financing.
How Are Microbreweries Using 504 Loans Today?
There are many challenges microbrewery owners face: applying for a license from the Alcohol and Tobacco Trade and Tax Bureau, setting up trademarks for different beers, finding quality employees, apply for state and local licenses, choosing your distributors, determining a location. Financing real estate shouldn’t be a headache, especially since the success of your brewery is all about location, location, location.
When considering real estate for your microbrewery, especially if you are looking to get out of your lease and purchase your own building, the SBA 504 loan is a great option. This loan program partners with conventional lenders to provide microbrewery owners with affordable financing to purchase real estate, meaning you only need to provide 15% as down payment. The 504 loan offers consistently low fixed rates, 10-, 20-, and 25-year terms, and is fully amortized (which means no balloon payments). All of this makes it a great option for anyone looking to expand their microbrewery.
Bear Republic Brewing Company took advantage of a 504 loan by partnering with TMC Financing, and have seen stellar results. They offer award-winning food and world class, handcrafted ales to their California customer base. They were established in 1995 by third and fourth generation Sonoma County residents, ironically located in the heart of wine country. The Norgrove family prides themselves on offering a family friendly atmosphere and more than 14 freshly brewed beers on tap. They recently submitted a 504 loan request of $2,915,000 to complete the build-out of tenant improvements for their new restaurant and microbrewery located at 5000 Robert Lake Rd., Rohnert Park, CA that consists of 11,257 square feet of restaurant space.
Can a Microbrewery Qualifying for the SBA Green Energy Program?
A great bonus to applying for a 504 loan is the SBA Green Energy Program, which gives you access to even more financing. You can qualify for this program if you following the guidelines below:
- Buy or construct a building that consumes 10% less energy than your current location
- Buy the building you now lease and make upgrades to consume 10% less energy
- Buy or construct a building that produces 10% of the energy it consumes or produces fuel to reduce fossil fuel consumption, using equipment financed through the loan
If you follow these guidelines, or work with a certified development company to ensure you meet these guidelines, you could qualify for funding through the SBA and their Green Energy Program up to $5.5 million.
A 504 loan is specifically tailored to support small, single-use businesses like microbreweries, and offers incentives that can help you capitalize on the current beer boom.
You can find out more about 504 loan financing and the Green Energy Program from one of TMC Financing’s 504 loan experts. TMC is an SBA Premier Certified Lender and a high-volume loan provider. With over 35 years of experience, TMC can help you find the financing that is best for you and guide you through the 504 loan process. Contact TMC Financing today.
- Using the SBA Green Energy Program to Increase Commercial Financing - April 18, 2023
- What Is a Certified Development Company? - May 12, 2022
- The SBA 504 Program: Why It’s an Optimal Finance Solution for Self-Storage Operators - June 22, 2020