Distillery loans: SBA rates and eligibility
Distilleries · NAICS 312140 · Program that usually fits: 7(a) and 504
Distillery loans fund stills, fermenters, bottling lines, a production building and often a tasting room. The hard part is cash flow. Whiskey and other aged spirits can sit in barrels for years before they sell, so a new distillery spends heavily long before revenue catches up. Many deals pair a 504 loan for the building and equipment with a 7(a) loan for working capital. Lenders focus on the owner's plan to bridge the aging period and on distribution.
Who qualifies
Craft and independent distilleries that are for-profit and meet SBA size standards for manufacturers. Alcohol production is eligible. The distillery needs a federal TTB distilled spirits plant permit, state licenses and local zoning approval before it can produce. Lenders want distilling or beverage-industry experience, or a hired head distiller with a track record. Start-ups need at least 10% equity, and lenders often want much more because of the aging period.
Which SBA program fits
504 for building and equipment
As manufacturers, distilleries can get up to $5.5 million in 504 debenture financing for a production building, stills and bottling lines at a long fixed rate. The business must occupy most of the building.
7(a) for working capital and acquisitions
A 7(a) loan funds barrels, grain, packaging and the cash needed through the aging period, or buying an existing distillery with its brands, equipment and inventory. Terms run up to 10 years for these uses.
Express for tasting rooms
SBA Express covers tasting room build-outs, smaller equipment and point-of-sale systems under $500,000. Many distilleries use the tasting room to bring in cash while aged spirits mature.
What borrowers use the money for
- Stills, fermenters and mash tuns
- Production building and warehouse space
- Barrels and aging inventory
- Bottling and labeling lines
- Tasting room and gift shop build-out
Typical loan amounts, down payment and terms
Distillery loans usually run from $500,000 to $3 million, and larger 504 projects go beyond that. Equity injection is at least 10%, but new distilleries are often asked for 20% to 30%. Owner-occupied buildings get up to 25 years, and equipment and working capital up to 10 years. Lenders may add an interest-only period during construction.
What lenders look at for a distillery
Lenders want a cash flow plan that shows how the distillery survives while aged spirits mature. Many distilleries sell unaged products like vodka, gin or white whiskey first, or rely on tasting room sales. Lenders discount aging inventory as collateral because its value depends on quality and market demand. They also review distributor agreements, state shipping rules, excise tax planning and production capacity. Specialized equipment has a limited resale market, so personal collateral is common.
Example: a $1,500,000 loan
At today's maximum variable 7(a) rate of 10.00% over 10 years, the payment would be about $19,823 a month. Most well-qualified borrowers get a lower rate. Try your own numbers.
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Today's rate caps
These are the SBA's maximum 7(a) rates with prime at 7.00%. See current SBA loan rates and SBA 504 rates for the full picture.
| Loan amount | Maximum spread | Maximum variable rate today |
|---|---|---|
| $50,000 or less | Prime + 6.5 | 13.50% |
| $50,001 to $250,000 | Prime + 6.0 | 13.00% |
| $250,001 to $350,000 | Prime + 4.5 | 11.50% |
| Over $350,000 | Prime + 3.0 | 10.00% |
Related industries and lenders
SBA lenders active nationwide
Questions about distilleries loans
Can I get an SBA loan to start a distillery?
Yes. Distilleries are eligible for SBA 7(a) and 504 loans. A start-up needs a detailed plan, distilling experience or a qualified head distiller, and permits in process. Lenders usually ask for more than the 10% minimum equity because aged spirits delay revenue.
Does the SBA lend to alcohol businesses?
Yes. Producing and selling alcohol legally is not a bar to SBA financing. Breweries, wineries, distilleries and liquor stores all use SBA loans. The business must hold the required federal and state licenses. Lenders do review compliance history closely.
Can an SBA loan finance whiskey aging inventory?
It can fund barrels, grain and the working capital needed during aging, usually through a 7(a) loan. Lenders don't count barrel inventory at full value as collateral, so they rely on other assets and the business plan to approve the loan.
Do I need a TTB permit before applying for a distillery loan?
You can apply before the permit is issued, but lenders typically make it a condition before funding or before production starts. The TTB process can take months, so many borrowers start it early alongside the loan.
What is the SBA 504 limit for a distillery?
Distilleries are manufacturers, so the 504 debenture can go up to $5.5 million. With the bank's first lien and the borrower's equity, the total project can be much larger. The building must be at least 51% owner-occupied.
Sources: SBA 7(a) terms, conditions and maximum variable rates; Federal Reserve H.15 selected interest rates (bank prime loan rate); November 2026 SBA 504 debenture pricing, as published by CDCs; SBA FOIA 7(a) and 504 loan-level data.