SBA 7(a) Brewery, Winery and Distillery Feasibility Study

Beverage makers in 7(a): a long decline

Brewers, winemakers and distillers took 3,278 SBA 7(a) loans worth $1.75 billion from FY2017 to FY2026, and approvals have drifted down for most of that time: 528 in FY2017, 394 in FY2019, 296 in FY2022, 247 in FY2025 and 152 in FY2026. Dollars held up better until FY2023, at $187.7 million, before falling to $100.0 million in FY2026. No metric here passes our distinctness screen against the 7(a) program or beverage lending across both programs, so the trend is the signal.

The median loan is $250,000, with half the loans falling between $100,000 and $600,000: equipment, working capital, a tasting room or an acquisition more often than a new production building. Franchise share is 0.40%. The Huntington National Bank leads by count with 203 loans and $56.5 million, but Live Oak Banking Company, with 198 loans, leads by far on dollars at $250.7 million, a sign of larger production deals. Manufacturers and Traders Trust Company has 164 for $33.8 million, TowneBank 81 for $59.5 million and Newtek Bank, National Association 66 for $33.2 million. California leads with 369 loans, then New York with 222, Ohio with 197, Minnesota with 173 and Pennsylvania with 172.

Losses that build with age

At least 3.9% of the 1,818 loans disbursed in FY2017 to FY2021 were charged off, and 1.3% within five years, so the losses build as the business ages. Cancellation is 10.3% at minimum and 10.7% at most. A lender should read that pattern as a market that funds reliably and then wears down: the opening years are carried by novelty and local loyalty, and the later years by distribution and margin.

What a beverage study must test

SBA's code identifies a maker of beer, wine or spirits, and says nothing about the taproom, tasting room or events that often carry the revenue; the rest of manufacturing is outside this class, and wineries are inside it. So a feasibility study for a 7(a) beverage project has to test each revenue line separately: on-premise sales against traffic and competing taprooms, wholesale volume against distributor commitments, and event income against the calendar; the cost of equipment and fit-out against the resale market for used brewing gear; debt service coverage in a mature year, not the opening one; and, where real estate secures the loan, an appraisal of the building for a buyer outside the beverage trade.