Cash flow is the lifeblood of a craft brewery, microbrewery, brewpub or tasting room, and the efficient management of cash receipts, payables, payroll, and other transactions is a strategic priority for the growth-oriented brewery owner. Here are some of the cash-flow strategies that financially savvy craft brewery owners are using today to get that competitive edge:
Understand your operating cycle: Regardless of size, every brewery, brewpub or taproom must deposit, monitor, and manage cash receipts; make payments; fund purchases; and invest in the company. Reviewing and understanding each step in this cash-flow cycle can help a company work more efficiently.
Review your payroll process: If you pay your employees twice a month instead of every other week, you will be managing 24 payroll periods instead of 26 during the course of a year, making your company more efficient.
Capital is so important to growing a business: If you don’t have what you need for your business’s development, all you’re doing is paying your bills and just getting by. Having enough working capital to pay those bills on time every month is important, but to take your business further, it’s growth capital you should be paying close attention to. To do that, you have to understand how growth capital works, what it does, and how it helps your company develop from a small local brewery into to something much larger and stronger.
Even if your brewery is growing, you may find yourself needing extra cash to cover day-to-day expenses such as payroll, rent and inventory, or to pay for short-term projects that could grow your revenue in the long run. Uneven cash flow is one of the biggest challenges of craft breweries throughout the country. In a perfect world, you’d walk into your local bank and walk out with a business loan long before you wound up in a cash crunch. Well, those days are long gone! If you haven’t been in business at least two years, or lack good credit and collateral, chances are a traditional bank loan is never going to happen.
A cash flow loan may be used for any business expense, but some common uses are:
High ROI short-term opportunities
Purchasing highly-discounted inventory
Short-term cash flow loans are best used for short-term projects that would divert money from day-to-day expenses but ultimately grow your business, like taking on a big contract with a major company or adding extra seating in your restaurant. If you need cash fast, a cash flow loan may be your lifeline.
Cash flow can make or break a craft breweries health. More often than not, maintaining it is a balancing act between credit and cash on hand, and it's a tricky tightrope to walk. As your business begins to grow, this intricate balance has the potential to become even more complicated. Especially if you're relying on big clients or irregular payment cycles, your cash flow can become unpredictable. As the numbers grow, so do the stakes and the best possible asset you can have is a plan.
Here are a few other brewery financing options to consider:
Brewery Expansion Loan - Designed for prime brewery owners with better risk profiles, our brewery expansion loan is an extended-term loan with rates ranging from 9.99% - 36%, terms of 18 to 24 months, multiple payment options, and loan sizes up to $250,000. It’s large-scale growth capital if you're looking to invest in bigger projects, with the same speed and simplicity LVRG is known for. GET STARTED
Invoice Financing - We’re helping thousands of brewery owners overcome cash flow gaps by advancing payments for their outstanding invoices. We can deliver the funds as early as the next business day by purchasing your outstanding invoices without interfering in your relationship with your customers. Instead of waiting 30, 60 or 90 days to get paid, click any of your outstanding invoices to get the amount transferred to your bank account instantly and securely. Pay salaries, buy equipment, travel for business, and more. You're free to focus your time and energy on maintaining and growing your brewery, not your invoices. Peace of mind guaranteed. LEARN MORE
Revenue Based Brewery Financing - Instead of a brewery being required to pay fixed interest payments like a typical bank loan, a revenue based brewery loan is paid with a percentage of revenues. With loan amounts up to $2 Million dollars and funding in as little as 24 hours, it helps you grow your brewery and it does not saddle you down with long-term, highly encumbering debt. LEARN MORE
Brewery Line of Credit - A brewery line of credit provides flexibility that a regular brewery loan doesn’t. With a brewery line of credit, you can borrow up to $100,000 and pay interest only on the money borrowed. You then draw and repay funds as you wish, as long as you don’t exceed your credit limit. Need to manage cash flow? Buy inventory? Pay for a surprise expense? Then a brewery line of credit makes sense. GET STARTED