Brewery, Winery and Distillery Feasibility Study in California

No state has more SBA loans to breweries, wineries and distilleries than California, which ranks 1 of 53 with 427 loans and $355.6 million approved from FY2017 to FY2026. Inside California the class ranks only 16 of 39, and the location quotient of 0.86x puts their share a little under the national one. The median loan is $350,000, or 1.21x what the class borrows at the median nationwide; the middle half runs from $150,000 to $1.0 million. Neither the median nor the outcome floors pass our distinctness margin against both the state and the class, so what follows is about shape and direction.

A shrinking count and one dominant lender

The direction is down. California approved 74 beverage loans for $66.3 million in FY2017, but only 33 in FY2021 and FY2023 and 29 in FY2026, for $27.5 million. Live Oak Banking Company stands out in the lender table with 87 SBA 7(a) loans for $113.6 million, far more than CDC Small Business Finance Corp. (22 loans, $3.8 million) or Newtek Bank, National Association (20 loans, $9.6 million). Under 504, 19 loans for $34.0 million went through The Mortgage Capital Development Corporation, followed by CDC Small Business Finance Corp. (7 loans, $17.3 million) and Bay Area Employment Development Company (7 loans, $11.1 million). The mix overall is 369 under 7(a) and 58 under 504, and the franchise share is 0.00%. San Diego (52 loans) and Sonoma (48) lead the counties, ahead of Los Angeles (38), San Luis Obispo (23) and Napa (21).

Losses arrive late

Of 212 loans disbursed in FY2017 to FY2021, 5.2% have gone to charge-off so far, yet only 1.4% did so inside five years of approval: most of the losses in this cohort came after year five. That pattern fits a business whose inventory takes years to age and whose debt is long. Cancellations after approval took 12.1% of FY2017 to FY2024 approvals, or 13.0% counting loans not yet disbursed, close to the state and class patterns.

What a California beverage study must test

A study has to test demand in two markets at once, the wholesale or distribution channel and the visitor who buys on site, and price each separately. Cost must include tanks, stills or crush equipment, bonded space, and the cash tied up in product that cannot be sold yet. Debt service coverage should run past year five, since that is where this cohort's losses fell, and it has to survive a slow sales year for aged stock. The appraisal should treat the production building as special purpose and value any vineyard or tasting room on its own evidence.

Notes on the record. The industry code reveals nothing beyond a borrower in beer, wine or spirits production, so a taproom, tasting room or event business attached to the plant is invisible in these figures. And wineries, once a class of their own, are counted here, while the rest of manufacturing has been taken out.