What's on tap? Helping Colorado's beer industry to grow

Breweries have finance options beyond banks

The beer industry is booming in Colorado – the craft beer market alone has up to $1.15 billion impact on the state’s economy, and it's growing.  CNN named Denver the best beer city in America in 2015, and Money magazine touted Denver as the best city to live in the West in 2015 and a “mecca for millennials”.  With the influx of millennials arriving in droves, our staggeringly low unemployment and a booming economy, our great beer state is looking to embrace more growth in the market.

According to the Brewers Association, Colorado is home to six of the 50 largest breweries in the U.S. and ranked third for the number of craft breweries in 2014. Colorado is home to more than 10 percent of the nation’s craft breweries and the state ranked first in the nation for output per capita. The state produced nearly 1.7 million barrels of craft brew, the third-highest production in the nation in 2014.

So what does that all mean for local brewers? Managing for growth and capturing more market share. Brewers are undoubtedly looking for resources to grow their business as the beer boom continues across the country and here in Colorado.

The number one need for breweries looking to start or expand operations is capital for equipment purchases.  Two Evergreen-based breweries, including Lariat Lodge Brewing, looked to a finance company when assistance from banks wasn’t applicable. 

  “They stepped in and helped when the limitations of the bank stopped progress,” Lariat Lodge owner Anders Ruikka says.

Since independent lessors are not subjected to the same regulatory standards as banks are today, leasing companies can offer flexible financing structures to small businesses for equipment purchases without tying up working capital. Equipment leasing can be the ideal option and alternative to traditional bank lending for breweries that want to invest in the necessary resources to grow their business while not becoming over-leveraged.

Here's a list of beverage industry-related items that may be readily financed:

  • Brewing equipment (tanks, vessels, kettles, kegs, fermenters, canning lines, pumps, filters)
  • Lighting
  • Refrigeration
  • Technology
  • Build-out of tasting rooms
  • Kitchen equipment
  • Purchase of raw materials
  • Packaging

Financing these types of business expenses can position a brewery for growth and free up cash for other areas, including unforeseen circumstances or operational needs, while keeping the brewery running efficiently and tapping into this thriving market.

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