Brewery, Winery and Distillery Feasibility Study in Texas

Texas producers close more often and borrow more

Texas stands apart on cancellation and on loan size. At least 5.7% of Texas brewery, winery and distillery approvals from FY2017 to FY2024 were cancelled, 7.8% at the ceiling, a rate lower than both the Texas figure across every asset class and the rate for beverage makers nationally. And the Texas median of $460,000 is 1.59x the national median for the class. Both differences pass our distinctness margin. Volume tells a quieter story: the 160 approvals worth $142.6 million rank Texas 8 of 53, but the location quotient of 0.56x shows the class weighing far less in Texas SBA lending than in the nation's, and it places 19 of 39 among the state's classes.

Who funds Texas producers

Texas loans in the middle half run from $205,175 to $1.2 million. SBA 7(a) carried 137 and SBA 504 carried 23, with Capital Certified Development Corporation leading 504 on 10 loans worth $16.5 million. Among guaranteed lenders, Live Oak Banking Company and Prosperity Bank tie at 12 loans, yet $16.0 million at Live Oak Banking Company against $5.4 million at Prosperity Bank puts the larger tickets with the former. VeraBank National Association has 7, and Frost Bank and PeopleFund 6 each. Franchising barely figures at 1.9%. Travis County leads with 21 approvals, Harris follows with 19 and Bexar with 15, and the Hill Country counties of Hays, Gillespie and Blanco show 9, 6 and 5. Annual approvals have slid, from 23 in FY2017 to 8 in FY2026.

Late losses on bigger loans

Charge-offs reach 3.2% of the 95 Texas loans disbursed in FY2017 to FY2021, with 1.1% inside five years of approval; much of the Texas loss therefore arrived after the early years. Both are floors. For a borrower, the low cancellation figure means an approved Texas beverage deal usually goes ahead; the harder task is proving the business can carry a larger loan for the long run.

A feasibility study for a Texas brewery, winery or distillery should therefore spend real effort on the later years. It needs demand from visitors and local trade in the specific county, distribution reach beyond the taproom, and production cost per barrel or per case set against a loan near $460,000. Debt service coverage has to hold once the novelty fades and competitors mature, and the appraisal must face a special-purpose building that is worth less to a buyer outside the beverage trade.

On coding: a borrower's code shows only that it makes beer, wine or spirits, not whether it also runs a taproom, tasting room or event venue. Wineries were folded into this class, which now covers these three industries and no other manufacturing.