Brewery, Brewpub and Taproom Feasibility Study for USDA B&I, SBA and Bank Loans

Craft beer is contracting on every published count, and the one part of it that holds is the taproom. MMCG Invest prepares brewery, brewpub and taproom feasibility studies for USDA Business and Industry, SBA 7(a), SBA 504 and conventional financing that underwrite the project on barrels sold across the bar at taproom revenue per barrel rather than on distribution growth, apply the Brewers Association's own benchmarking and closure data as the base rates, carry the three-tier statute, the excise tier, the TTB timeline and the wastewater surcharge as the operating facts they are, and report the debt service coverage ratio (DSCR) by year with the taproom cap and the distribution downside shown side by side.

The Brewers Association counted 9,578 craft breweries at the end of 2025, down 2.9 percent, with 300 openings against 481 closings; craft production fell 4 percent to 22.0 million barrels on the May 2026 revision, 60 percent of breweries made less beer than the year before, and the first half of 2026 brought another 4 percent decline. Taprooms, 3,784 of them, and brewpubs, 3,525, are about three-quarters of all craft breweries and about 15 percent of craft volume, and they were the best-performing models again: brewpub volume fell 1.7 percent and taproom volume 3.9 percent in 2025 against 8.9 percent for microbreweries, and 57 percent of taprooms grew in the first half of 2026. The closure base rate is about 5 percent a year, 481 closings on 9,796 operating at the start of 2025, and the named 2026 closures run from Oakshire in Eugene and Whiner in Chicago to the Guinness Open Gate brewery in Maryland with 174 jobs. A production brewery file built on wholesale growth runs against that record. A taproom file does not.

The economics explain the difference. The Brewers Association's financial benchmarking for 2023, the most recent public figures, put direct-to-consumer beer at an average of $1,276.14 per barrel against $602.02 for distributed beer, total revenue per barrel at a $453.78 25th percentile and $1,714.29 75th percentile, direct labor at $121.10 per barrel, up from $85.60 in 2018, and state excise at $6.28 per barrel. Every barrel moved from the distributor to the bar roughly doubles revenue per barrel, and that is the whole underwriting case. The general restaurant method and the SOP 50 10 8.1 spine are on the restaurant feasibility study hub; the bar-format demand data are on the bar and nightclub feasibility study page.

A rural brewery and taproom, in a town under 50,000 people and outside its urbanized area, is a USDA Business and Industry borrower. Nothing in 7 CFR Part 5001 excludes alcohol producers; the borrower ineligibility list at 5001.127 reaches gambling above 15 percent of revenue and prurient income, so a taproom with gaming terminals keeps gaming under the line. The equity test is the binding one. A new business needs 20 percent balance sheet equity or 25 percent of total eligible project cost invested, and 25 percent either way if the guarantee is to be issued before construction is complete, with a 0.50 percent fee for that; the Agency may raise the requirement for higher-risk industries, and the craft contraction gives it grounds. A guaranteed loan above $1 million to a new business requires an independent feasibility study under 5001.306(a)(3)(i), prepared to the components in Appendix A to Subpart D with projections running at least two years past full operational capacity. Part 5001 sets no universal DSCR floor; the lender documents adequate coverage, and the only numeric coverage minimums in the entire Part are eligibility tests for refinancing at 5001.102(d): 1.1 times historical where the majority of the loan refinances existing debt, and 1:1 on current income to demonstrate recovery. Appraisals must give as-is and prospective values on construction and strip going-concern value before the lender applies its discounts, which matters because a brewhouse is special-purpose equipment that resells at a heavy discount. Fiscal 2026 terms are an 85 percent guarantee on loans under $5 million, a 3.0 percent initial fee and a 0.55 percent annual retention fee; no fiscal 2027 notice had been published as of October 9, 2026, and the program's appropriation is unresolved under a continuing resolution to December 11. The rules are on the USDA feasibility study page and MMCG tracks the program in its USDA Financing and Grant Monitor.

An urban brewery is an SBA borrower. A brewery that buys its building is a 504 project; breweries are not on SBA's published list of special-purpose property examples, which names wineries but not breweries or distilleries, and the study requires the CDC's written classification before assuming the 15 or 20 percent tier, because the lender's appraiser may haircut brewhouse-specific improvements regardless. A brewery in leased space is a 7(a) project at the 1.15 times floor with the brewhouse and cellar as equipment on a useful-life maturity and the lease matching the loan term. The fiscal 2027 SBA fee waiver reaches rural-area businesses on 7(a) loans of $700,000 or less and on 504 debentures, and a rural brewery qualifies through that test. Value-Added Producer Grants fund planning at up to $50,000 and working capital at up to $200,000 in fiscal 2026 for producers of agricultural products, and REAP has funded brewery solar, Fort George in Astoria at $1 million, but the program's 2026 suspension and rule changes mean the study leaves REAP out of the capital stack.

Revenue is built in barrels and pours. The study reports the brewhouse and cellar capacity, the barrels the taproom can sell across its own bar at the pours per barrel and the pint price the market supports, the share that goes to distribution at the wholesale price, the food program, the merchandise and events line, and the non-beer beverages that ran about 6 percent of revenue in the benchmarking data. The state statute sets the ceiling. Montana's small brewery license allows taproom sales from 10 a.m. to 8 p.m., 48 ounces per customer per day and a 2,000-barrel annual on-premises cap, and the study models that cap explicitly; Wisconsin allows self-distribution to 300,000 barrels with a 2,000-barrel brewpub cap; Michigan allows a micro brewer to self-distribute if total sales are 2,000 barrels or less, taproom sales excluded; North Carolina allows self-distribution to 50,000 barrels and up to three additional retail locations; Colorado's cap is reported but not verified. Demand is measured in the trade area and against the state's density: Vermont carries 14.6 breweries per 100,000 adults and Montana ranks third nationally, so a per-capita figure above the metropolitan rate is a finding and the study computes population per brewery inside the trade area rather than citing the state.

The ramp runs over three years or more toward capacity, with on-site sales carrying the early coverage, and the study labels the ramp an assumption because no public cohort reports it; capacity utilization of about 55 percent across the industry is reported secondhand and not relied on. Costs come from the benchmarking percentiles rather than the averages, which sit above their own 75th percentiles on several lines, and from the practitioner gross-margin targets of about 75 percent on taproom beer, 60 percent on draft and 40 percent on packaged, labeled as practitioner benchmarks.

Federal excise is $3.50 a barrel on the first 60,000 barrels for a brewer producing no more than 2 million, then $16 to 6 million and $18 above, with no TTB filing fee for the brewer's notice and a bond only where excise liability warrants it. TTB issued original brewer's notices in a median of 43 days in June 2026, 35 in July and 34 in August against a 75-day service goal, and the study schedules 60 to 90 days for the half of applications that take longer than the median, with the state license after it. State fees are modest: California's small beer manufacturer at $500 a year plus a $1,135 application, Texas $3,000 per two years for a brewer and $1,100 for a brewpub, Florida $3,000 per plant and $500 for a brewpub, Pennsylvania about $2,155 in the first year, Washington $150 for a microbrewery, Michigan $50 for a micro brewer. State excise runs from $0.08 a gallon in Colorado to $0.62 in North Carolina.

Wastewater is the operating line brewers forget. Brewery effluent runs 5,000 to 20,000 milligrams per liter of BOD and 3,000 to 15,000 of TSS, twenty to eighty times the 250 to 300 milligram surcharge thresholds in the ordinances reviewed, and surcharge rates run from $0.06 to $0.76 a pound in cities from Newport, Rhode Island to Logan, Utah. The study carries the surcharge as a line and a pretreatment contingency for pH neutralization and solids capture as capital.

No published cost guide or association survey gives a dated brewhouse price, and the study uses vendor quotes with the public range as a check: a 10 to 15 barrel brewhouse and cellar at $150,000 to $350,000, glycol, boiler and installation at $25,000 to $80,000, a canning line at $60,000 to $140,000, and an all-in 10 to 15 barrel distribution plant at $750,000 to $1.5 million by vendor estimate. Taproom fit-out and furniture follow the restaurant build-out ranges on the independent full-service restaurant feasibility study page. On a $2.5 million rural project at 25 percent equity, the guaranteed loan is about $1.875 million, the initial fee about $47,800 on the guaranteed portion, and the first-year retention fee about $8,800. The study presents the stack at the new-business equity level that avoids the pre-completion fee, and shows the SBA alternative for an urban site.

The study reports DSCR as EBITDA over total debt service by year against the lender's covenant on a USDA loan, stated plainly as a covenant and not a regulatory floor, and against 1.15 times on a 504 or standard 7(a) loan. Three cases are shown: a taproom-heavy base case, a distribution-heavy downside at wholesale revenue per barrel, and the state-cap case where a Montana-style statute limits on-premises volume. Sales are tested at 10, 20 and 30 percent below base, ingredient cost three points up, wages 10 percent up, rates 100 basis points up, and the closure base rate of about 5 percent a year is reported as context for the reserve. No public charge-off rate exists for NAICS 312120, and the study says so; SBA lending to breweries ran to 3,184 loans and $1.57 billion over the decade to fiscal 2019, about half of it in the last three years of that window.

A MMCG brewery study includes the program eligibility and equity test, the trade area and density analysis, the competitive census with closures by date, the state statute review with the taproom cap and self-distribution limit, the TTB and state licensing timeline, the barrel-and-pour projection with the distribution split, the operating projection on benchmarking percentiles with excise and wastewater carried, the project cost with vendor quotes, the capital stack, the DSCR schedule on three cases with break-even and sensitivities, the collateral discussion on the brewhouse and a signed conclusion. Standard delivery is nine to sixteen business days; expedited delivery in five to seven is available. Fees begin at $4,900 for a single-site SBA 7(a) study and run $7,500 to $15,000 for USDA B&I and 504 studies. Revisions required by the lender or agency are made at no additional cost under MMCG's written acceptance guarantee. See MMCG's feasibility study methodology and where we work.

Rural production brewery and taproom, USDA B&I: a $2.6 million project in Marion, North Carolina at 25 percent equity, not feasible as a distribution-led plan (0.55 times on supportable volume), feasible as restructured around a 600-barrel taproom at $1,150 a barrel against $500 self-distributed (1.27 times). The tasting-room and distillery versions are on the winery feasibility study and distillery feasibility study pages.