Business Loans for Microbreweries and Vineyards

Name: Business Loans For Microbreweries And Vineyards
Creator: Savvy
Published: 2022-01-14T15:24:49+10:30

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Written by , updated on July 26th, 2023

How do I get a business loan to buy a microbrewery or vineyard?

Loans to buy existing businesses are more involved than those designed to assist your current winery, for instance. There are typically several further steps in the application and qualification process. If the business you’re looking to buy is a particularly small and inexpensive one, there’s a chance you could purchase it with an unsecured small business loan for a vineyard or winery. This is rare, however, so you’ll be required to put up an asset as collateral for your loan in most cases. This usually comes in the form of residential or commercial property.

Qualification requirements

To buy microbreweries and vineyards with a business loan, your lender will assess your profile as a borrower and purchaser. You’ll need to have been employed in a role which boasts considerable transferrable skills, such as in a managerial position with expertise in the running of the business, or owned a similar business either currently or previously.

They’ll request to see at least the past two years of financials for the business you’re looking to buy, the one you currently own and those for your personal situation. Your personal and business credit scores must also be strong to give your lender confidence you’ll be able to steer the ship effectively and, more importantly, keep up with your repayments.

Get help from the experts

The process of being approved for a loan to buy a business is often a long and difficult one. Because of this, you can benefit significantly from the help of a business loan broker when seeking out the financing you’re looking for to purchase. In essence, your broker will do all the heavy lifting for you, from finding and comparing loans from their lender panel to ensuring your application meets your lender’s criteria.

On top of this, though, business loan brokers are best positioned when it comes to negotiating great deals on your behalf. With their existing relationships with a range of lenders, they can gain access to deals you otherwise may not have been able to obtain if you were applying on your own. In doing so, the cost of your large business loan in terms of interest and fees can be slashed significantly with a deal tailored to your needs.

Other finance options for business purchases

Secured and unsecured business loans aren’t the only finance types you can look to when seeking out a business purchase. You may instead want to take out a secured business line of credit, which provides you with access to funds up to a pre-approved limit. The main benefit of this type of loan is that you can withdraw funds whenever you need them. As such, you can borrow the funds to purchase your business, pay down part of your debt and have cash available to use however you like across your business.

Business overdrafts can also be utilised in a similar way, except they’re attached to your business’ bank account. Overdrafts don’t have a minimum monthly payment, enabling you to pay off your debt at your own speed. However, both of these can come with higher interest rates than business loans, which could cost you more overall.

How do I get a business loan to invest in my vineyard business?

Alternatively, if you’re wanting a small business loan to help out the microbrewery or vineyard you currently own, you’ll find the process to be much simpler. These can be sought for just about any business purpose you may need, as they’re designed to be highly flexible in nature. When it comes to seeking out investment for a current business, there are two main options you’re likely to look to:

Unsecured business loans

These loans are the most accessible to the widest range of businesses in the market, enabling them to borrow funds without the requirement to put up any asset security which they may not have or simply may not wish to use as part of their loan. These are amongst the fastest business finance options also, potentially enabling businesses to access the funds they need on the same day they apply, and span repayment terms as short as three months up to a maximum of five years.

In terms of how they can be used, there are essentially no restrictions provided the loan is for business purposes. Many microbreweries and vineyards will seek out a loan to assist in multiple areas, such as adding to their overall cashflow, helping pay for inventory such as glass bottles or hops, fitting out the front of house, covering staff salaries and even paying for other equipment you may need. You can compare a wide range of unsecured business loan offers using our comparison table above to help you make an informed decision on which is best and most affordable for you.

Equipment finance

Alternatively, you could look to equipment finance if you’re wanting to buy a specific piece of machinery or other equipment. This can be anything from distilling systems, kegs, grain mills, canning and bottling machinery, grape and fruit bins, front of house computer systems and more. This type of finance utilises the asset itself as security for the loan, meaning the amount you can borrow is directly tied to its purchase price.

Perhaps the most significant benefit of asset finance is that there’s no real limit to your potential borrowing range. Because the loan is tied to the asset’s value, there isn’t a hard cap like there is with business loans (up to $500,000 maximum). Also, because these loans are considered safer than unsecured finance due to the presence of collateral, you’ll be subject to lower interest rates and fees on average.

Types of business loan

Unsecured business loans

The most common type of business finance, unsecured loans enable businesses to access the funds they need without attaching an asset to the loan as security. Some lenders may allow you to borrow up to $500,000 and, because there's no collateral, offer same-day approval.

Secured business loans

If your business already owns valuable assets, such as property or expensive equipment, you may choose a secured business loan instead. These loans may increase your borrowing power beyond what an unsecured loan can offer and, crucially, typically come with lower interest rates.

Small business loans

Business loans don't always have to be worth hundreds of thousands. If you're operating a small business and need a boost to help you keep on top of your expenses or expand your company, you may be able to take out a loan starting from as little as $5,000 and unlock further capital.

Low doc business loans

Just because you don't have all the required documents for a standard business loan doesn't mean you're out of options. Low doc finance enables you to use alternative documentation, such as other business financials, in the application process to access the funds you need.

Lines of credit

A commercial line of credit allows you to draw from your loan account whenever your business needs access to their funds, instead of managing a lump sum and repaying it like a regular loan. This can add flexibility to your finance arrangement, providing money when you need it.

Invoice finance

Invoice finance presents another option to business operators looking to free up cash through outstanding invoices yet to be paid by their customers. Your invoice finance can either be invoice discounting or factoring, which present different options when it comes to your invoices.

Equipment loans

A common reason for seeking out a loan is to purchase commercial equipment. You can do this either with an unsecured arrangement or one with the equipment itself as collateral, with the latter potentially increasing your borrowing power and lowering your interest rate.

Supply chain finance

With this finance, when your business purchases product, your supplier provides an invoice which you send to your financier and pledge to repay by a set date. From there, your supplier sells the invoice to your financier at a discounted rate, while you repay the full amount to your financier.

Inventory finance

Under an inventory finance agreement, your lender pays your supplier directly for inventory, which allows it to be signed off and sent to you. From there, you can pay off your debt within a pre-determined period to your lender, which may be longer than the regular debtor period.

Overdraft facility

An overdraft facility is attached to an existing financial account belonging to your business, such as a transaction or savings account, and enables you to borrow up to a set limit after the account’s balance reaches zero. These overdrafts are repaid with interest, but only on what you use.

Cash flow loans

You may simply be in a position where your business needs a boost to its cash flow. If this is the case, there’s a range of stop-gap solutions which may be suitable for your situation, from standard unsecured loans to specialist cash flow loans, invoice finance or even an overdraft.

Why compare business loans through Savvy?

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Reputable lending partners

You can compare business loan offers through a range of trusted Australian lenders, giving you more confidence in the process.

Online comparison process

You can fill out our simple online form to generate business finance quotes tailored to your business' needs in minutes.

How much you can borrow for your business loan

The type of loan and its intent

The value and type of security

Your business’ turnover

Your personal and business credit score

Your trading history

The type of loan and its intent

The value and type of security

Your business’ turnover

Your personal and business credit score

Your trading history

Frequently asked questions about business loans for microbreweries and vineyards

How are microbreweries and vineyards valued?

There are a number of different ways in which the microbrewery or vineyard you’re looking to purchase is valued. These include:

Location: whether it can support the growth of your business
Property size: if you’re buying the land, this will largely inform its value
Existing assets: these will form part of the purchase, so they’ll need to be included
Financial history: how successful they’ve been in recent years and why they’re looking to sell

Will I have to buy commercial property as part of my business purchase?

Not necessarily – you may only wish to purchase the business operating on the land, rather than the land itself. In doing so, you’ll take over the lease the current business owners are in charge of and continue paying rent to the landowner. Because commercial property loans are so expensive, many business owners may find it’s outside of their reach to purchase both the land and business itself. However, you may wish to purchase both the land and the business, in which case a property loan will be required.

Which documents will I need for a loan to purchase a business?

When purchasing your winery, vineyard or microbrewery, you’ll need two years of business financials from both your current and new business (as well as two years of personal financials if you haven’t owned one before. These include:

ABN/ACN and GST registration
Business bank statements
Tax returns
Profit and loss statements
Accounts receivable and payable
ATO Integrated Client Account (ICA)
Record of expenses
A detailed business plan projecting revenue over the next 12 to 24 months

Will I need the same documents when taking out an unsecured business loan?

Probably not – if your unsecured small business loan is on the smaller side (such as less than $200,000 to $250,000), your lender may not require any business financials. You’ll still need to submit your ABN/ACN and GST registration and business bank statements, as well as personal identification such as your driver’s licence, as a minimum requirement for this type of finance.

Can I lease equipment instead?

Yes – there are plenty of equipment and vehicle leasing options to explore when looking to add to your business’ available assets. These are often preferred by businesses who don’t want to necessarily commit to the purchase of their asset straight away, instead paying off a residual at the end of the lease term to either keep it, sell it or continue leasing it.

Generally, financiers will rent out the equipment to the business operator for up to five years, with options to upgrade during this agreement (which would involve an adjustment to the rental payment). In this situation, leases can either come with a residual which you'll be required to pay or without, whereby you'd simply hand the equipment back.

Additionally, while you can claim for interest and depreciation on a vehicle or equipment loan, up to 100% of your lease payment is tax-deductible.

Am I able to pay out my finance agreement early?

Yes – many of our partnered lenders offer unsecured business loans for a winery, vineyard or microbrewery without any penalties for paying out your loan early. This isn’t generally the case for equipment finance and other secured loans, though, although you may find options for the latter. Both of these are still able to be paid out early but will come with fees for doing so.