Brewery, Winery and Distillery Feasibility Study in Michigan

Michigan beverage makers at national weight

Michigan breweries, wineries and distilleries borrow from SBA at almost exactly the national rate: the location quotient is 1.00x. The state's 146 approvals from FY2017 to FY2026 total $72.3 million and rank 9 of 53, while the class places 14 of 39 among Michigan asset classes. A median of $250,000 sits at 0.86x the class median nationwide, and neither that figure nor the cancellation and charge-off floors clears our margin when tested on Michigan's record across all classes and on beverage makers across the country. What the Michigan cell does show plainly is the pull of a single lender.

One bank and the rest of the field

The Huntington National Bank holds 49 of Michigan's 129 SBA 7(a) loans in the class, worth $10.4 million, far ahead of Fifth Third Bank with 8 worth $6.1 million and ChoiceOne Bank with 6 worth $1.0 million. A Michigan producer seeking SBA credit is entering a market where one bank has written far more of these loans than any rival and knows the category's numbers. SBA 504 carried 17 loans. The middle half of approvals runs from $54,000 to $656,000, equipment such as tanks or a canning line at the low end and a production building near the top. Franchising is negligible at 1.4%. Kent County leads with 16 approvals, Oakland and Wayne have 15 each, Ottawa 11, Berrien 8 and Grand Traverse 7. The record peaked early, with 22 loans in FY2017 and 31 in FY2018, and has run lower since: 9 in FY2025 and 7 in FY2026.

Losses that build with time

Cancellations took at least 13.1% of Michigan beverage approvals dated FY2017 to FY2024, rising to a 14.6% ceiling once pending disbursements are counted against them. Of the 75 Michigan loans disbursed over FY2017 to FY2021, 6.7% are charged off to date but only 2.7% fell within five years of approval. A Michigan lender's exposure therefore runs well past the launch year, through the long stretch in which distribution, competition and taste can shift.

A Michigan brewery, winery or distillery study has to show where the volume goes. Taproom traffic, self-distribution and wholesale accounts each carry different margins, and the plan should prove its mix rather than assume it. It must cost production equipment and permitting against a ticket near $250,000, then test debt service coverage well beyond the opening years, since much of the recorded loss came later. If a building is financed, the appraisal will treat it as special-purpose space, and the study should show what that space is worth to a buyer outside the trade.

The industry code tells us only that a borrower makes beer, wine or spirits. Whether a Michigan producer also sells by the glass on site, in a taproom or tasting room, or rents out event space, cannot be seen, and the class now covers just these three industries, with the rest of manufacturing left out.