Brewing and distilling equipment finance

How do craft breweries and distilleries finance equipment?

Craft breweries and distilleries typically use hire purchase for the brewhouse and stainless fermentation vessels, which are mechanically simple and last for decades, and lean towards leasing for canning and bottling lines, where speed and format flexibility change faster than the core tanks do. Because a new producer often has no trading history when the equipment is ordered, lenders weigh the founders' personal financial standing and the strength of the business plan more heavily than they would for an established brewer.

Buyers are craft breweries, microbreweries, distilleries and brewpubs, most of them either starting up or expanding capacity to meet demand a smaller system cannot keep up with. The equipment involved, a brewhouse, fermenters and a canning or bottling line, is capital-intensive relative to the size of the business buying it, and is usually needed before the producer has any revenue at all, which makes outright cash purchase impractical for most new entrants regardless of how confident they are in the product.

Hire purchase fits the brewhouse and fermentation vessels well, because well-made stainless tanks are mechanically simple, have no real technology to date, and a producer intends to keep using the same tanks for the life of the business. Packaging equipment is a different decision: canning and bottling line speed and format flexibility improve steadily, and a producer scaling into new retail listings may need to upgrade packaging capacity well before the original brewhouse needs replacing, which is a reason to consider financing the packaging line on a separate, shorter facility rather than bundling everything into one long-term agreement.

Stainless brewing vessels hold value well and have a genuine secondary market among other craft producers, which helps a new business secure finance even without trading history behind it. The piping, temperature control and installation work that connects the tanks together is far more bespoke to the specific site and has little resale value on its own, so lenders tend to focus their security on the vessels themselves rather than the installation around them.

The mistake most new producers make is treating the finance quote for the equipment as the whole cost, when installation, commissioning and connecting services such as glycol cooling and drainage are frequently a large share of the total project and are not always included on the same invoice as the tanks. Excise registration and duty timelines with HMRC also need to line up with when the finance actually starts, since repayments begin whether or not the licensing is in place to start selling.

People also ask