It's a great time to run your own vineyard or microbrewery. There's always a market for wine and beer, and Australian drinkers are more and more willing to try new drinks from smaller boutique producers.
But how will you finance your business? Money doesn't grow on grapevines. Equipment costs alone make commercial brewing an expensive prospect, while vineyards require an entire farm's worth of equipment and land.
This page will guide you through some of the loan options for microbrewery and vineyard owners, whether you're starting from scratch, expanding or buying an existing business.
What are the different types of microbrewery or vineyard?
Before even thinking about applying for a business loan for your microbrewery or vineyard, you need a clear idea about your business. Your plans could include any of the following:
Brewpub. A restaurant and pub selling beer. Factor in kitchen and brewing costs.
Microbrewery. A small-scale brewery producing unique beers. Your microbrewery may sell beer directly to the public along with tastings and food like a brewpub, or it may just brew beer for sale elsewhere.
Small-scale vineyard. A vineyard producing small batches of its own wine. Your costs will be lower but you won't be able to produce enormous quantities of wine. Developing a strong product and brand is key.
Cellar-door winery. The definition of a cellar-door winery is one that offers tastings to customers. You may serve food as well.
Vineyard/restaurant. Take your food and wine to the next level by running a full-scale restaurant to serve your wines with carefully paired dishes.
Tour-focused vineyard. The process of winemaking is fascinating, from cultivating grapes to serving the final product. One way of building your brand and creating demand for your wine is to open your vineyard up for tourists.
Lumi Unsecured Business Loan
Lumi Unsecured Business Loan
Fast approval
No early repayment fees
Short loan terms
100% confidential application
Lumi Unsecured Business Loan
Borrow up to $300,000 with an unsecured business loan from Lumi.
The array of loan options can be confusing. Consider your business needs carefully, consult with lenders and always read the fine print. Remember that your choice of loan depends on multiple factors:
Your business situation. If you're starting a business from scratch you might face bigger funding obstacles. If you already run a microbrewery or vineyard you have more options: you can use your business, equipment or inventory as collateral and secure a more favourable loan.
Your needs. Getting a loan to buy land and start a vineyard is a different prospect from getting a loan to purchase brewery equipment. A line of credit might be very helpful to cover fixed expenses for a few months but it probably couldn't fund a major renovation to your microbrewery.
Your assets and security. Do you own property? Do you have a significant amount of cash or other assets? If you have something you can use as security, your loan options begin to open up.
Example: Bishop's End Brewery
Bishop's End is a microbrewery in Sydney's Inner West run by Michael and Jayne. Established three years ago, Bishop's End sells craft beer to restaurants across New South Wales.
Michael and Jayne have decided to expand their warehouse brewery. They want to double beer production and open a restaurant on the premises. Space isn't a problem and they have funds to cover the restaurant outfit, but they need to a buy a new brewing system in order to produce more beer.
Loan choice: Equipment loan
The brewing system costs almost $200,000. Michael and Jayne opt for an equipment loan. They negotiate a four-year loan with a good interest rate and are able to use the brewing equipment as security. They pay a deposit of $28,000 and won't have to make repayments in the first 6 months.
What expenses do I need to plan for when opening a vineyard or brewery?
Producing and selling beer and wine is a serious commercial undertaking, even at the smallest scale. When looking at a business loan you'll need to factor in significant costs for equipment, premises and licenses.
Premises. You can't brew craft ale in your bathtub. You need a suitable premises in which to brew, store and possibly serve your lagers and ales. Make sure you consider factors like room temperature, ceiling height (for your tanks and boilers) and ventilation. Flooring is important too, as liquid spills can erode some surfaces over time and possibly damage your equipment, making drainage another key consideration.
Brewing equipment. The list of essential brewing equipment is extensive, and expensive. You will need boilers, cooling systems, kegs, fermentation tanks, cleaning equipment and bottling or canning machines.
Storage. This includes storage tanks and refrigerations systems.
Serving and kitchen equipment. If you're planning to run a microbrewery that doubles as a gastropub serving your beer with food, you'll need to add in all the equipment costs of a commercial kitchen and restaurant.
Vineyard
Real estate. You can't grow grapes without land. Your property costs are a major expense, but remember that the quality of the soil matters as much as the price.
Vines. Good wine starts with good grapes. Look at wholesale vine nurseries to get an idea of costs. Your choice of vine and grape depends on the soil, temperature and also market preferences. It's a tricky blend to get right.
Farm equipment. You will need equipment like a grape harvester, mulcher and vine weeder.
Winepress and storage. No vineyard is complete without a winepress and barrels. You'll also need bottles, plus bottling and labelling equipment.
Licensing costs
You can't make and sell alcohol without the proper licences. Every state in Australia has different licences and prices, so check local regulations to find out about producer or wholesaler liquor licences that will allow you to:
Produce your own alcohol.
Sell your alcohol on the premises
Licensing rules differ by state, but usually you are permitted to produce your own alcohol and also sell it outside your premises. In NSW, for example, the licence is called a producer/wholesaler licence. The licence costs $500 but this can be reduced to $200 if you produce less than 100,000 litres per year.
The Winemaker's Federation of Australia has a helpful page breaking down the licence details of each state in Australia.
Excise rates
All beer and spirits made in Australia are subject to a form of tax called excise duty. The excise is administered by the Australian Tax Office and is calculated by taking the volume of alcohol produced and multiplying it by its alcoholic content.
Microbreweries will need an excise license from the Australian Taxation Office (ATO). You can learn more about excise rates and licenses on the ATO website.
Wine produced in Australia is subject to an equalisation tax instead of an excise rate. The tax is calculated as 29% of the wholesale value of the wine you produce.
Brand trademarks
Part of succeeding as a business is branding. If you create a distinctive, appealing and memorable label or name for your beer or wine, you should consider a trademark. Trademark applications are handled by IP Australia, a government body that oversees intellectual property matters. Trademarks can cost up to several hundred dollars.
How can I increase my chances of getting a loan approved?
Loan applications can be daunting but the more research and preparation you do the better. If your application is backed by expertise, experience, a solid plan and some assets, you'll be able to negotiate better rates and financing options.
Here's what you need:
A business plan. This is particularly important if your vineyard or microbrewery business is new. A detailed business plan reassures potential lenders and demonstrates that your business can actually go from plan to profit.
Security. Having property, cash or other assets to use as security makes it easier to negotiate a better loan. The higher fees and interest rates on an unsecured loan translates to a lot more costs over the course of the loan.
Skills and experience. Lenders also take into account your experience, skills and qualifications and how they relate to your business. If you've worked as a commercial brewer you're well placed to run a microbrewery. Ten years of experience in the wine industry will impress a lender if you want funds to open a vineyard.
Financials. If you've been in business for a while you'll need to show a lender your financial records. These include tax returns, a balance sheet, a profit-and-loss statement and a cash flow statement.
How do I compare business loans for vineyards or microbreweries?
Whether you're brewing beer or making wine the way to compare loans is to look at the following:
Interest rates. Check if the loan has a fixed or variable interest rate. How will an interest rate increase affect your ability to pay back the loan?
Repayment terms. How must the loan be repaid? Does the loan offer an initial period without repayments?
Fees. Some loans have no fees while others come with surprising charges, such as account establishment fees or ongoing maintenance fees. Always factor in fees when comparing loans.
Flexibility. For many businesses, flexibility is key. Being able to extend a loan's terms or repay on a flexible schedule can be of great benefit.
I have a few more questions about business loans for my microbrewery or vineyard.
Your personal and business credit histories affect your ability to get a loan. But if your credit history is a big problem there are bad credit business loans that might help. You can also get a free credit score here.
Online lenders can be a great way to secure funding. They tend to have looser lending requirements than banks, but are still bound by regulations. However, they don't always have the same level of specialised service for businesses as banks.
Personal and business credit cards can be used to cover business expenses. They're not a great option for purchasing major vineyard equipment or a commercial brewing system, but for smaller purchases they're a good idea.
How likely would you be to recommend finder to a friend or colleague?
0
1
2
3
4
5
6
7
8
9
10
Very UnlikelyExtremely Likely
Required
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
Important information about this website
finder.com.au is one of Australia's leading comparison websites. We are committed to our readers and stands by our editorial principles
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labeling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
We make money by featuring products on our site. Compensation received from the providers featured on our site can influence which products we write about as well as where and how products appear on our page, but the order or placement of these products does not influence our assessment or opinions of them, nor is it an endorsement or recommendation for them.
Products marked as 'Top Pick', 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
Please read our website terms of use and privacy policy for more information about our services and our approach to privacy.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
