Brewery, Winery and Distillery Feasibility Study in the Chicago-Naperville-Elgin, IL-IN Metro Area

Fourth of 443 areas for beverage makers, yet low in the area's mix

Makers of beer, wine and spirits find Chicago-Naperville-Elgin fourth among 443 areas, yet the class is sixteenth in the area's own ranking and its 0.79x location quotient is under the national share. The file totals 96 approvals and $69.2 million. A median of $387,500 sits at 1.34x the class's national figure; the central loans range from $150,000 to $950,000. Cook County has 52 of the loans, DuPage County 11, and Kane County, Lake County, IL and Lake County, IN 8 each.

The program mix is 72 SBA 7(a) loans and 24 SBA 504 loans, a one-in-four share of property loans. No franchise share is printed for the Chicago producers, because Loan Analytics withholds it on thin counts.

Development companies and banks

The 504 side belongs to SomerCor 504, Inc. (10 loans, $15.6 million) and Small Business Growth Corporation (7, $5.2 million). For 7(a), The Huntington National Bank leads with 9 loans and $2.4 million; 8 loans each are held by Live Oak Banking Company ($8.1 million) and JPMorgan Chase Bank, National Association ($3.1 million); and Byline Bank has 6 loans for $6.0 million. Live Oak's and Byline's loans are far larger than Huntington's. Such rows show current holders only and are no window on any lender's wishes.

Producers in the Chicago file lost 15.3% or more of approvals to cancellation, and the ceiling is again 15.3%. In the 49-loan disbursed group, charge-offs reach 10.2% at least so far, but Loan Analytics withholds the within-five-years rate for want of loans behind it, and it is no zero. Approvals climbed from 8 in FY2017 to 14 in both FY2021 and FY2022, the latter worth $16.4 million, and sank to 5 in FY2024 and FY2026.

Chicago brewing and distilling: the study's tests

A producer is a manufacturer, and the study should establish whether it also sells at retail. The study should test the volume of production the equipment can deliver, the share of sales through taproom, distribution and events, and the licensing and excise obligations that apply at each step. All the industry entry says is that the borrower makes beer, wine or spirits. Taproom, tasting room and event use are invisible in it, so the study cannot assume the retail side either way. Capital cost includes tanks, stills, packaging lines and a building fitted for floors, drains and utilities. If the borrower owns the property, the appraiser needs to price the building apart from the brewing or distilling equipment. Coverage of the loan payment must be run through the months while output climbs. Totals for Cook, DuPage and the other counties exclude any loan whose county was not matched on the July 2023 list.