So you’re getting ready to start up a new brewing company in your city, or you’re looking at getting some new upgrades for your business?
If you’ve never had to get brewery finance for your business, or it’s been a while, chances are you might be wondering how to get brewery equipment financing to support your equipment purchases and upgrades.
The big questions brewery owners are always asking when they’re ready to get started buying equipment or upgrade their business: how can I qualify for brewery equipment financing?
The Challenge of Searching Online for Brewery Finance Answers
When you take to the web for all of your brewery finance related questions for your brewery company, you have to make sure to validate that the information you’re receiving is valid and legitimate.
If you land on a website that offers answers, and also provides financing as a service, you have to make sure that the information they’re giving is accurate and honest.
What is unfortunately not uncommon among financiers who may offer brewery equipment financing leasing is that they’ll “promise” certain rates and make “unbeatable” claims. Low payments, daily payment lenders, crazy-low financing rates, and more.
But those kinds of rates may just be offered to catch your eye and get your interest. The requirements for those “unbeatable” offers may not even be attainable by most people that need the financing in the first place.
Most of these kinds of companies are just trying to get your attention in order to secure a quick sale. You might get brewery financing, but you’ll probably pay a lot more in the long run than you really should.
How Do I Know If I Will Qualify for brewery finance?
On a fundamental level, there’s a few basic things you’ll need to know in order to determine whether or not you’re likely to qualify for financing.
Basically, most brewery finance companies of any kind are going to look for two big things.
1) How long have you been in business?
Most brewery finance companies, especially banks, will be looking to see how long you’ve been in business. Getting the “better rates” is going to require you to be have been in business for a couple of years.
Most people starting out, especially if you’re just now looking at brewery equipment financing leasing, won’t have many years of business operations under their belt.
This doesn’t mean you won’t qualify, but you’ll get a better deal in the long run if you’ve been in business for a while. Of course, if you’re just starting out, you’re going to need to get the brewing equipment one way or another.
If you own other businesses you can offer a cross corporate guarantee from the other business you own to strengthen your credit profile to give you a better rate.
2) What’s your credit score at?
When you haven’t been in business for a while, your credit score becomes even more important than ever. The higher your credit, the better your deal will be.
But like the number of years in business, you don’t need a perfect credit score to qualify for some kind of brewery equipment leasing deal.
Once you factor in how long you’ve been in business (or if you’re just starting out) and what your credit score is, then you can start to look around for brewery financing options.
That’s where brewery equipment financing companies come into play. And when you’re a newer brewery, you might be looking at having to make a down payment of one payment and work with terms up to 72 months.
It's exciting to recognize the monthly payments you might have to make for your start up brewery business, it’s also a great way to tell if you’re being given an unrealistic proposal from a brewery equipment financing company.
Click here for a brewery equipment finance calculator to calculate how much your brewery equipment financing payments could be and see how much brewery equipment you can afford to buy based on your monthly budget.
In the end, having to pay a fiixed monthly payment that doesn't fluxuate and is a legitimate businesses offer is great and will help you get the doors open of your new brewery.
What are the tax benefits for brewery equipment financing?
Having new and upgraded brewery equipment for your brewery, acquired with affordable and fixed monthly payments, can have a lot of benefits for your brewery. With brewery equipment financing you get section 179 tax benefits. With the passage and signing into law of H.R.1, aka, The Tax Cuts and Jobs Act, the deduction limit for Section 179 increases to $1,000,000 for 2018 and beyond. The limit on brewery equipment purchases likewise has increased to $2.5 million.
If you don't want to take all the tax savings in the first year as a start up brewery because most of your revenues will be in the following years than you can depreciate the equipment over it's usefull life. Also, You can structure your brewery equipment financing as a FMV buy out and write off 100% of your payments each year of your lease off your taxable income.
Ready to Apply online for a brewery Equipment financing Loan? Feel free to call Trust Capital and speak with a brewery equipment finance specialist that can take your application over the phone at 866-458-4777 and see How You Can Qualify for Brewery Equipment Financing.