Funding for Craft Breweries and Distilleries in Texas

From grain to shelf, and where the cash waits

A craft beverage producer makes a product that takes time. Beer ferments in tanks, and a distillery's spirit may rest in barrels before it is sold. During that time the grain, hops, yeast, bottles, cans, labels and labor are paid for. Revenue arrives after the product is packaged, delivered or poured in a taproom, so the money invested in a batch is tied up until the last case is sold.

1. Equipment. Fermenters, brite tanks, stills, mash tuns and boilers are large, specialized purchases.
2. Raw materials. Malt, hops, grain, botanicals and barrels are bought in volume.
3. Production time. The batch occupies equipment and labor for days, weeks or longer.
4. Packaging. Cans, bottles, kegs, labels, cartons and a packaging line are separate costs.
5. Sales. Taproom sales are quick; distributor and retail sales are paid on terms.

Tank space as capacity

For a brewery, a tank is a unit of production. If every tank is full and the beer sells, the only way to grow is to add tanks, a larger system or a packaging line. For a distillery, stills and barrel space play the same role. Equipment purchases are lumpy: a single tank can cost more than a month's profit, and buying one often means buying fittings, chilling capacity and floor space with it.

For illustration: the retail shelf timeline

Say a brewery spends $14,000 on ingredients and packaging for a large batch that will supply a retail account. It pays $5,000 in labor and utilities across the same weeks. The retailer pays on net-forty-five terms after delivery. The brewery has laid out $19,000 and will wait several weeks to recover it, and if the tanks are occupied by that batch, nothing else can be brewed to sell in the meantime. These round numbers are for explanation only, not our terms or typical results.

Taproom cash versus distribution cash

A taproom and a distributor are very different customers. The taproom pays at the moment of sale, at the highest margin. A distributor or retailer buys larger volume at a lower price and pays on terms. Many producers build their business on both, and the cash flow follows the mix: taproom sales cover the weekly costs, while larger accounts need production ahead of payment.

When an owner moves toward distribution, the cash cycle lengthens. Production, packaging, delivery and the wait for payment all take weeks. Working capital can cover that longer cycle while the new accounts become routine.

Common reasons to apply

• Buying a new fermenter, still or packaging line
• Funding a large production run for a new account
• Building out a taproom or tasting room
• Covering payroll and rent during a seasonal slow period

Funding runs from $25,000 to $5,000,000. The application takes about five minutes, uses a soft credit pull, and funding can arrive in as little as 24 hours. Sole proprietors can apply. We do not give licensing advice for alcohol production.