Craft Brewery Revenue Based Financing
A revenue based loan could be the lifeblood of your craft brewery, microbrewery, brewpub, or taproom; and provide it with several financial benefits. When your business is growing, chances are you'll need an injection of cash to continue its growth. Bank loans are often times too restrictive and near impossible to obtain these days. In this situation, revenue based financing may be the best solution. If you use it wisely, a revenue based loan could do wonders for your craft brewery, microbrewery, brewpub, or taproom. Without being capitalized, chances are you'll wind up in a growth stalemate. Here are three ways that revenue based loan can save, and even grow your business:
Helps Grow Your Brewery
If your craft brewery, microbrewery, brewpub, or taproom, is under 2 years old and starting to scale, you obviously want to ride the wave. You cannot do this without a dependable source of capital. Bank criteria is typically a minimum of 2 years in business, strong cash flow, positive ratios, perfect credit, and be profitable. Which no craft brewery, microbrewery, brewpub, or taproom is within the first two years, often times, not even within the first five years. Revenue based financing from LVRG fits with business as little as 6 months operating, with no minimum credit requirements and no use of capital restrictions. Revenue based financing simply makes sense. This type of loan will give you a shortcut to cash since it only requires a few months of business bank statements; whereas banks require 2 to 3 years of business and personal tax returns, income statement, P&L, balance sheet, personal financial statement, debt schedule and countless other documents to complete loan package. Many times with revenue based financing, your business bank statements are enough to demonstrate that you can repay the loan.
Get Cash Quickly
You're busy running a business, you don't have to time to compile overly detailed loan packages and chasing after loan sources. All you know is that you need cash quickly and even if you could get approved for a bank loan, is it really worth all the trouble? Revenue based financing will provide cash quickly with a very short turnaround time. If you are prepared to apply for a revenue based loan and have the appropriate supporting documents ready to go, you may be able to get funding in as little as 24 hours. Compare that to a bank loan where the loan process is on average 2 to 8 months. This is one of the main advantages of revenue based financing. Some businesses actually consider this a lifesaver, and will go this route over a bank loan any day.
No Lingering Debt
Revenue based financing will not weigh you down with long-term debt. When you obtain a revenue based loan, you will not be looking at 10 to 25 years to repay a loan for money that you're using today. Think about it, why would you want the headache of paying off a 2016 marketing campaign all the way into 2041? No to mention, having every asset to your name locked up that entire time as well. Having this type of long-term bank debt could hurt your chances for getting funding in the near future, which all craft brewery, microbrewery, brewpub, or taproom owners will need. With a revenue based loan, you will pay it off in roughly 6-24 months, which makes more sense for short-term expenses. Additionally, LVRG is usually willing to replenish the loan after roughly 50% is paid down, so you can continue getting more capital along the way.
Bottom line, if you want to sell more beer, you need to brew more beer. How do you brew more beer without upgrading your facility, or scaling up your equipment? Very simple. You don't! How do you open a taproom to sell more beer without being capitalized? That's pretty simple too. You don't! The art and craft of brewing beer may be compared to rocked science, but the financing component sure isn't. Owning a brewery takes a constant flow of capital, and without being capitalized, you are going struggle. It's really as simple as that!
As you see, the steps mentioned above show you how a revenue based loan could be advantageous for your craft brewery, microbrewery, brewpub, or taproom. It helps you grow your business quickly and it does not saddle you down with long-term, highly encumbering debt. It gives you the cash that you need quickly, to grow your business your way. What more could a growing business need?
LVRG Funding is one of the nations largest and most trusted resources of revenue based financing and we excel in the brewery finance space. Want to know if a revenue based loan is right for your business, give us a call (855) 998-5874. We're here to help!