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

Ohio beverage makers: third in the nation, small tickets

Ohio places 3 among states for 7(a) loans to beverage manufacturing, with 197 approvals across FY2017 to FY2026 worth $86.6 million, though the class is only 10 of 39 inside Ohio. The loans are small. A median of $150,000 is 0.60x the nationwide 7(a) benchmark for breweries, wineries and distilleries, and the typical approval lies somewhere from $50,000 to $533,400. Franchising barely registers at 1.0% of loans. Most of these look like independent craft producers financing equipment, inventory and modest premises, not large plants.

The Huntington effect

Huntington dwarfs the field: The Huntington National Bank has 84 loans and $25.5 million. German American Bank has 16 loans worth $5.3 million, Telhio Credit Union Inc 12 worth $5.2 million, First Commonwealth Bank 8 worth $4.4 million, and The Community Bank 8 worth just $698,100. One lender accounting for so much of the table is a fact about SBA's holder records and not a statement about what any bank requires. Franklin County has 37 loans, Hamilton 33, Cuyahoga 19, Summit 12, Delaware and Licking 10 each, Lucas 8, Fairfield 7, and Lorain and Montgomery 6 each.

Floors

Among approvals made through FY2024 at least 11.7% never closed, and the ceiling is identical, so undisbursed loans change nothing. For the 120 loans funded early, charge-offs stand at a floor of 2.5% so far and the five-year number is printed as 0.00%, a good sign but still a floor.

Testing an Ohio brewery, winery or distillery

A study should examine the distribution routes open to the product, whether through a taproom, self-distribution, wholesalers or direct sales, and test volumes against production capacity. Equipment is a large share of cost, so itemise fermenters, stills, packaging and cooling against a ticket near $150,000. Working capital must carry inventory that ages before it sells. Show coverage with a slow first year and with licensing delays. An appraiser will separate building, equipment and brand value, and the study should say which of the three secures the loan.

The class follows the industry of the borrower, so it records that a business makes beer, wine or spirits while saying nothing about taproom or event revenue. Wineries are included in the class definition used here.