Brewery, Winery and Distillery Feasibility Study in Minnesota

A craft beverage state, by SBA count

Minnesota is one of the busiest states for SBA loans to breweries, wineries and distilleries, ranking 4 of 53 with 208 approvals worth $98.1 million across FY2017 to FY2026. Its location quotient of 1.89x means beverage makers take a far larger share of Minnesota's SBA lending than of the nation's, and the class ranks 7 of 39 inside the state. Yet the loans look ordinary in size and outcome: the median is $261,350, 0.90x the national class median, and our test finds no gauge, whether median, cancellation or charge-off, that differs by our margin from Minnesota lending overall and from producers nationwide at once.

Half the Minnesota producer loans sit between $135,750 and $596,500, the range of a brewhouse and cellar package or a taproom build-out more than a production plant. SBA 7(a) carried 173 approvals. BankVista is current holder of 19 of those worth $9.4 million; Sunrise Banks National Association, Minnwest Bank and Old National Bank hold 12 each, and Frandsen Bank and Trust holds 11. SBA 504 carried 35, with Midwest Business Finance Corporation holding 13, Twin Cities-Metro Certified Development Company 7 worth $5.8 million, Amplio Economic Development Corporation 6 and Southeastern Minnesota 504 Development Corporation 5. Franchise share is 0.00%, so every borrower here is an independent producer.

Light losses and a fading pipeline

Losses have been light. Of 117 Minnesota beverage loans disbursed in FY2017 through FY2021, 1.7% have been charged off to date and 0.00% within five years, both floors. Cancellation runs at 10.4% of FY2017 to FY2024 approvals, or 10.9% counting undisbursed loans. The more telling number is volume: approvals ran at 31 in FY2017 and 30 in FY2018, held between 16 and 26 through FY2024, then fell to 12 in FY2025 and 4 in FY2026. Whatever the cause, a lender today sees far fewer Minnesota producers asking for SBA money than earlier in the period.

What a Minnesota beverage study has to test

Hennepin County holds 66 approvals, Ramsey 19 and Dakota 15, so the demand case for most projects is argued in the Twin Cities. The study's first job is to separate the businesses a producer usually runs side by side: wholesale volume through distributors, and on-site sales in a taproom or tasting room, which SBA's code does not show at all, since the code identifies only a maker of beer, wine or spirits. Budgets need firm equipment and build-out quotes and a working capital line for inventory that ages before it sells. Repayment capacity should rest on taproom traffic the site can actually draw rather than on distribution growth. The appraisal is the hard part: brewing equipment and a special purpose building have thin resale markets, so the lender needs liquidation values next to going concern value. The class counts only breweries, wineries and distilleries; other manufacturing is excluded.