Brewery, Winery and Distillery Feasibility Study in Indiana

Indiana producers lean on SBA 504

Beverage producers punch above their national weight in Indiana. Breweries, wineries and distilleries together drew 96 approvals worth $41.0 million in FY2017 to FY2026, which ranks Indiana 16 of 53 states, and the location quotient of 1.21x says the class takes a larger share of Indiana's loans than its national share. Inside the state it stands 11 of 39 among classes. The most telling feature is the program mix: SBA 504 carried 30 of the loans and SBA 7(a) 66, a heavy tilt toward financing buildings and production equipment. Measured against both Indiana's all-asset record and producers nationally, none of the Indiana median, cancellation or charge-off figures clears our margin.

The median Indiana loan was $244,500, or 0.84x the national median for producers, and the middle half spans $90,750 to $501,500. Franchising does not appear at 0.00%. Indiana's development companies are the core lenders. Indiana Statewide Certified Development Corporation is the current holder of 10 loans worth $8.6 million, and Premier Capital Corporation and Regional Development Company hold 7 each, worth $6.1 million and $5.4 million. Among 7(a) lenders, The Huntington National Bank has 12 Indiana producer loans but just $1.1 million, so its loans are small. Marion County leads with 19 approvals, then Hamilton with 10 and Lake with 8. Volume has thinned since the early years: 18 loans in FY2017 and 17 in FY2018, against 6 in FY2024, though those 6 carried $6.3 million.

Early losses on Indiana beverage loans

Indiana's FY2017 to FY2024 producer approvals saw cancellations of at least 8.2%, with the ceiling also at 8.2%. Losses are the concern. Of the 56 Indiana loans disbursed in FY2017 to FY2021, 7.1% are written off so far, and 7.1% also failed within five years of approval, so every Indiana loss so far came early in the loan's life. These rates are floors.

What an Indiana brewery or winery study has to test

Early losses point a study at the first years of operation. Demand has to be tested both for the product, through distribution and wholesale reach, and for any on-site visitors, since a taproom or tasting room in Marion or Hamilton County faces different traffic from one in a smaller county. Cost testing must cover tanks, bottling or canning lines and the building at current quotes. An Indiana study should show debt service coverage through the ramp-up, when inventory ties up cash and sales are still building. For a 504 project the appraisal has to support the plant and land as real estate, and specialised production space is a narrow market for a lender to rely on.

One caution on the data: the industry code tells us the borrower produces beer, wine or spirits, but whether an Indiana site pours for visitors in a taproom or tasting room, or hosts events, is invisible in it, and wineries are counted inside this class rather than separately.