SBA 504 Brewery, Winery and Distillery Feasibility Study

A shrinking 504 record for beverage makers

From FY2017 to FY2026, makers of beer, wine and spirits took 642 SBA 504 loans totalling $625.4 million. The trend is the story. Approvals climbed to 96 in FY2021 and 97 in FY2022, when dollars reached $106.5 million and then $97.9 million, and fell in every year after: 55 in FY2023, 43 in FY2024, 40 in FY2025 and 24 in FY2026, for $24.2 million. None of its metrics stands far enough from the 504 program, or from beverage lending as a whole, to count as distinct by our test, so the decline is the clearest signal the cell carries. A lender reading it should ask whether the projects still being approved are the stronger ones or simply the ones left.

The median loan is $620,000 and the middle half runs from $331,500 to $1.2 million, sizes consistent with a production building and long-life equipment such as tanks, stills or a bottling line rather than a taproom fit-out alone. Franchises are almost absent at 0.78% of loans. Granite State Economic Development Corporation leads the CDCs with 42 loans and $29.7 million; WBD, Inc. follows with 38 loans and $39.8 million, Empire State Certified Development Corporation with 37 and $36.6 million, Florida First Capital Finance Corporation, Inc. has 28 for $30.1 million, while The Mortgage Capital Development Corporation, with only 23 loans, carries the largest dollar total in the table, $41.4 million. California leads with 58 loans, then Wisconsin with 41, Minnesota with 35 and Florida with 32.

Losses show up here

Unlike much of the 504 book, this class records real losses. At least 2.2% of the 321 loans disbursed from FY2017 to FY2021 have been charged off, well above the 504 program's floor across all assets, yet only 0.31% within five years of approval, a sign that the bulk of the damage came late. Cancellation after approval is at least 14.4% of FY2017 to FY2024 approvals, and up to 18.5% if undisbursed loans count as cancelled. Late losses push a lender toward a study that tests the business past its opening years, when the novelty of a new tasting room has worn off and distribution has to carry the volume.

What the study has to prove

The industry code tells us the borrower makes beer, wine or spirits; it does not show whether the site also runs a taproom, a tasting room or an event space, and the rest of manufacturing is excluded from the class. Wineries are counted here. A feasibility study for a 504 beverage project therefore has to test demand on each channel separately, on-site visitors and wholesale or self-distribution, with the licensing each requires; cost, including tanks, stills and packaging equipment whose resale value falls quickly; debt service coverage at realistic production volumes rather than nameplate capacity; and the appraisal, which must value a special-purpose production building with and without its equipment, because a lender's recovery depends on what another user would pay for the shell.