Brewery Feasibility Study: Capacity, Channels, Taxes and Financing

A brewery feasibility study tells a lender, a founder or a landlord whether one specific brewery or taproom, at one specific site, can sell enough beer through its taproom, its own deliveries and its wholesalers to pay its operating costs, its excise taxes and its debt at the coverage the capital source requires. It answers in barrels: what the brewhouse and cellar can make, what each sales channel will take, and what each barrel earns after tax.

Three facts shape almost every brewery and taproom loan file:

• Growth has slowed. Employer brewery establishments rose from 1,561 in 2013 to 5,218 in 2023, but the count grew by only 53, or 1.0%, in 2023 [1][2][3]. A new brewery now has to win share from existing ones.
• Taproom beer is taxed beer. Federal excise is due when beer is removed for consumption or sale, and that includes beer sold for drinking at the brewery [4]. A domestic brewer producing no more than 2,000,000 barrels a year pays $3.50 a barrel on its first 60,000 barrels [5].
• The format decides the rules. Census codes a microbrewery without a restaurant or bar as manufacturing (NAICS 312120), but a tap room or a brew pub that mainly serves drinks as a drinking place (NAICS 722410) [6]. That code sets the SBA size standard [7] and whether the higher SBA 504 limit for small manufacturers applies [8].

This page sets out what the study must prove, the federal data behind it, and how taxes, three-tier rules and each financing program shape the answer, with state rules sampled from 15 states, county density, wastewater costs and a document checklist. See also brewery and winery feasibility studies, the Kentucky bourbon distillery model study for a taxed alcohol producer with a visitor experience, and the restaurant feasibility study for a brewpub that is mainly a restaurant.

Every study ends in one of three conclusions: feasible as proposed; feasible with stated conditions, such as a smaller system, a larger reserve or a different channel mix; or not feasible as proposed, with the changes that would make it work.

What is a brewery feasibility study?

It is an independent analysis, written for the lender's file, of whether a proposed or existing brewery can support its financing. USDA's rule defines a feasibility study as a report by an independent qualified consultant "evaluating the economic, market, technical, financial, and management feasibility of the proposed project" [9]. Those five parts fit any capital source.

The first job is to define what is being financed, because federal statistics and lending rules split "brewery" into three codes: breweries (312120), drinking places, including tap rooms and brew pubs that mainly serve drinks (722410), and brew pub restaurants that mainly serve meals (722511) [6]. The primary code drives the SBA size standard, the 504 loan limit and the market data the study can use.

Exhibit 1. How federal statistics and SBA classify brewery formats

Source: U.S. Census Bureau, 2022 NAICS Index File and County Business Patterns 2023 (cbp23us); 13 CFR 121.201 and 120.931 (revised as of January 1, 2026). The small manufacturer limit requires a primary NAICS code in sectors 31 to 33 and all production facilities in the United States.

A feasibility study is not an appraisal. An appraisal estimates value on a date; a feasibility study tests whether the business can work, and what would have to change if it cannot. A lender may order both.

What does a lender need the study to prove?

A lender needs proof that the brewery's own cash flow will repay the loan under the program's rules, and that nothing about the site, the licenses or the operator breaks those rules. SBA's regulation states the standard plainly: "Loans must be so sound as to reasonably assure repayment" [8]. It also says SBA "may require professional appraisals of the applicant's and principals' assets, a survey, or a feasibility study" [8].

Exhibit 2. What the lender asks and what the study shows

Source: SBA SOP 50 10 8.1; 13 CFR Parts 120 and 121; 7 CFR Part 5001; 27 CFR Part 25; 40 CFR 403.3; Austin Water, as cited in each row.

SBA's SOP lists conditions that may lead SBA to request a study, including "Market saturation by industry type and location" and a "Highly specialized Project property" [10]. After a decade in which brewery establishments more than tripled, saturation is an obvious question for a credit officer, and the study answers it with local counts. For what separates a study a lender can rely on from one it cannot, see what makes a feasibility study bankable.

How large is the U.S. brewery industry?

It is a $29.4 billion manufacturing industry of about 5,100 to 5,200 employer establishments, most of them small. The 2022 Economic Census counted 5,093 brewery establishments with $29,407,838 thousand in shipments and 89,823 employees [14]. County Business Patterns counted 5,218 establishments and 98,647 employees in 2023 [3].

Exhibit 3. Breweries (NAICS 312120) in federal statistics

Source: U.S. Census Bureau, 2022 Economic Census (EC2231BASIC) and County Business Patterns 2023 (cbp23us), NAICS 312120.

Averages mislead here. Shipments per establishment work out to about $5.77 million (29,407,838 / 5,093), but a few very large plants carry that figure; in 2023, 4,053 of 5,218 brewery establishments, or 77.7%, had fewer than 20 employees [3]. The study's comparison set is local: breweries and taprooms of similar size, format and price.

Growth by year: fast, then flat

Exhibit 4. Brewery and drinking place establishments, 2013 and 2018 to 2023

Source: U.S. Census Bureau, County Business Patterns U.S. files for 2013 and 2018 to 2023 (cbp13us, cbp18us to cbp23us) [1][15][16][17][18][2][3]. Changes calculated by FSC.

Two readings matter for a loan. Brewery growth went from more than doubling between 2013 and 2018 to 1.0% in 2023, so a new entrant's volume comes mostly from existing breweries. And drinking places barely moved over ten years, 41,582 in 2013 against 40,835 in 2023, a 1.8% decline; taprooms compete with those bars for the same evenings.

Size classes: the middle is growing

Exhibit 5. Brewery establishments by number of employees, 2018 and 2023

Source: U.S. Census Bureau, County Business Patterns 2018 and 2023 (cbp18us, cbp23us), NAICS 312120 [15][3]. The 2023 file does not publish the 1,000-or-more class; published 2023 classes sum to 5,217. Shares and changes calculated by FSC.

The smallest class shrank while every class from 5 to 99 employees grew by more than half. A brewery with a taproom staffs serving shifts as well as a brew crew, so the study builds staffing by shift and hour rather than taking an industry average.

Drinking places: the on-premise competition

The 2022 Economic Census counted 40,911 drinking place establishments with receipts of $33,653,442 thousand and 441,817 employees [19], about $822,600 per establishment. Another 30,184 nonemployer drinking places reported $1,657,956 thousand in receipts in 2024 [20]. The supply survey counts them too.

Where are breweries concentrated?

Ten states hold just over half of all breweries: 2,720 of 5,218 establishments in 2023, or 52.1% [21]. Density, which is what a saturation test reads, varies far more than counts.

Exhibit 6. Top ten states by brewery establishments, 2023

Source: U.S. Census Bureau, County Business Patterns 2023, state file (cbp23st) [21]; Vintage 2025 population estimates (NST-EST2025-ALLDATA) [22]; 2022 Economic Census (EC2231BASIC) [14]. Density calculated by FSC from 2023 establishments and 2025 population. "Withheld" means Census did not publish the value to avoid disclosing data for individual companies.

Among the top ten, density runs from 0.68 breweries per 100,000 residents in Texas to 4.27 in Colorado. Smaller states run higher still: Vermont had 52 breweries for 644,663 residents (8.07 per 100,000), Montana 76 (6.64) and Maine 92 (6.50) [21][22]. Shipments follow plant size, not brewery counts: Ohio's 168 brewery establishments shipped $2,912,322 thousand in 2022, close to California's $3,083,097 thousand from 548 establishments [14]. The study repeats this test at county and trade-area level, where the answer for a specific site is decided.

County level: where the saturation test is decided

The 2023 county file publishes brewery counts for 497 counties holding 4,290 of the 5,218 establishments [23][3]. No county in it shows fewer than 3, so a missing county may still have one or two breweries; the study pairs the file with its own survey, including licensed producers not yet open.

Exhibit 7. Counties with the most brewery establishments, 2023

Source: U.S. Census Bureau, County Business Patterns 2023, county file (cbp23co) [23]; Vintage 2025 county population estimates (CO-EST2025-ALLDATA) [24]. Density calculated by FSC from 2023 establishments and 2025 population. Employee counts carry Census data-quality flags in the source file.

Counts and density tell different stories: Los Angeles County has the second-largest count but 0.90 breweries per 100,000 residents, Buncombe County 12.98. Among counties of 100,000 or more residents with at least 10 breweries, the densest was Ontario County, New York, with 20 breweries for 113,130 residents (17.68 per 100,000), followed by Missoula County, Montana (12.14) and Cumberland County, Maine (10.09) [23][24]. Those densities run roughly 7 to 12 times the national 1.53. A taproom there is not automatically infeasible, but it has to show whose customers it takes, and the study tests that with drive times, seats and evenings rather than a ratio alone.

What do breweries spend their money on?

Materials take about 35 cents of every shipment dollar, and packaging takes about a third of materials. In 2022 breweries reported $10,257,913 thousand in total cost of materials against $29,407,838 thousand in shipments [14].

Exhibit 8. Brewery costs per $100 of shipments, 2022

Source: U.S. Census Bureau, 2022 Economic Census, EC2231BASIC, NAICS 312120 [14]. Ratios calculated by FSC.

Exhibit 9. What breweries bought, 2022: materials consumed by kind

Source: U.S. Census Bureau, 2022 Economic Census, materials consumed by kind (EC2231MATFUEL), NAICS 312120 [25]. Shares calculated by FSC. Hops are not reported as a separate line.

Cans, glass and paperboard together cost $3,148,042 thousand, 32.5% of materials and more than three times the cost of malt. A taproom pint poured from a keg avoids most of that cost. These totals are weighted to large brewers, so the study uses them to check a budget built from quotes, not as inputs.

Barley: the farm input behind malt

Malt cost breweries $996,687 thousand in 2022 [25], and malting barley is its raw material. USDA's Economic Research Service tables show barley acreage and production lower in 2024 and 2025 than in 2023, while the price farmers received stayed above its 2020 level [26].

Exhibit 10. U.S. barley: acreage, production, price and food, alcohol and industrial use

Source: USDA Economic Research Service, Feed Grains Database, Yearbook Tables 1 and 6 (all-years file) [26]. Values as published; recent years can be revised.

Food, alcohol and industrial use of barley fell from 142.068 million bushels in 2020/21 to 110.7 million in 2025/26, about 22.1%, and the farm price rose 55.8% between 2020/21 and 2022/23 before easing (FSC calculations). A brewery buys malt, not barley, so the study prices malt from quotes and uses the barley series to test exposure to a grain shock. A farm brewery that grows its own grain is the exception: the study confirms acreage and yields, which also decide eligibility for the USDA producer grant described below. This page reports no hop statistics; the study prices hops from contracts.

What does a brewery pay its staff?

About $46,768 per employee in 2023 nationally, against $25,612 at drinking places, and state averages vary widely [3]. The figure is annual payroll divided by employees, so it mixes brewers, packaging crews and part-time servers.

Exhibit 11. Brewery supply and payroll in the 15 states sampled for this page, 2023

Source: U.S. Census Bureau, County Business Patterns 2023, state and U.S. files (cbp23st, cbp23us) [21][3]; Vintage 2025 population estimates [22]. Payroll per employee and density calculated by FSC.

Missouri shows why averages mislead: its 80 brewery establishments reported $78,319 of payroll per employee, more than three times West Virginia's $22,227, a gap large plants can create on their own. The study builds staffing by role and shift (brew, cellar, packaging, delivery, taproom and management), prices each role from local evidence, and adds payroll taxes and benefits; the Economic Census puts fringe benefits at $1,070,021 thousand against $4,150,854 thousand of payroll for the industry in 2022, about 25.8% [14].

How should the study model taproom, self-distribution and wholesale sales?

By barrel and by channel, because each channel has its own price, costs, tax position and, often, legal cap. A blended revenue per barrel hides whether the plan depends on volume the taproom cannot pour or the law does not allow.

• Taproom. The brewery sells pints and packaged beer to consumers on its own premises. It keeps the retail margin, and it pays federal excise on those barrels because a sale for consumption at the brewery is a removal [4]. TTB treats a taproom as a "tavern" on brewery premises, approved through the Brewer's Notice, and beer drunk there must be tax-paid or tax-determined [11]. Some states cap it: in Texas, a brewer's sales to consumers at the same premises may not exceed 5,000 barrels a year [27].
• Self-distribution. The brewery sells directly to bars, restaurants and stores. States that allow it set limits: North Carolina allows up to 50,000 barrels a year for breweries selling fewer than 100,000 [28], Texas up to 40,000 barrels for brewers producing no more than 125,000 [29], and Kentucky microbreweries up to 2,500 barrels [30].
• Wholesale. The brewery sells to a licensed wholesaler, which sells to retailers. In the statutes sampled for this page, that is the default route from brewery to retailer [28][31][32]. The brewery gives up margin in exchange for reach.

Exhibit 12. Illustrative contribution per barrel by channel (model assumptions)

Source: FSC illustrative model (calculator test case A); tax lines from 26 U.S.C. 5051 and the Texas Alcoholic Beverage Commission excise tax rates. Prices and costs are assumptions, not market data.

In this illustration a taproom barrel contributes about 11 times what a wholesale barrel does, which is why taproom volume is the most scrutinized number in a brewery study. A barrel is 31 gallons [5], or 248 sixteen-ounce pints. At an 85% pour yield, 900 taproom barrels a year is about 189,720 pints, roughly 542 a day over 350 open days (model arithmetic). The study proves that volume with seats, hours, turns and local evidence, then checks it against any state cap. Food, events and merchandise are modeled separately.

How do you size production capacity and utilization?

Capacity is the lower of what the brewhouse can brew and what the cellar can ferment; utilization is planned sales divided by sellable capacity. A plan that needs more than the plant can make fails on its face.

The study works through four numbers:

1. Brewhouse capacity: batch size in barrels × brews per week × operating weeks.
2. Cellar capacity: fermenter count × fermenter size × (operating days ÷ days per tank cycle).
3. Sellable capacity: the lower of the two × packaged yield after losses.
4. Utilization: planned sales ÷ sellable capacity, by year through stabilization.

Exhibit 13. Capacity and break-even in three illustrative plans (model results)

Source: FSC illustrative model; inputs are assumptions and outputs are model results (calculator.md, test cases A to C). Federal excise at the 26 U.S.C. 5051 reduced rate.

Plan A covers its debt at 72.5% utilization because nearly half its beer goes through the taproom. Plan B is limited by its cellar, not its brewhouse, and misses 1.15 coverage at 650 barrels; it needs 682. Plan C sells 80% of its beer at wholesale prices, so it needs 95.2% of capacity to cover its debt, which leaves no room for a slow year.

Ramp-up belongs in the same model. SBA's 7(a) standard asks projections to reach 1.15 coverage within 2 years of funding or of the end of construction [10], so the study shows the months below that line and sizes the reserve to carry them.

Which assumptions move debt coverage the most?

Taproom volume, price and channel mix move coverage far more than ingredient costs or the interest rate. Exhibit 14 reruns calculator test case A one assumption at a time.

Exhibit 14. Sensitivity of debt service coverage, illustrative plan A (model results)

Source: FSC illustrative model, same formulas as the calculator above; all inputs are assumptions, and every figure in the table is a model result. Federal excise at the 26 U.S.C. 5051 reduced rate [5]; the North Carolina case uses the per-barrel equivalent of G.S. 105-113.80 [34].

Three lessons follow. Operating leverage is high: a 10% drop in volume removes 37.6% of income in this plan. Moving ten points of volume from the taproom to wholesale costs more than any single price or cost shock, because a taproom barrel earns about 11 times a wholesale barrel. And ingredient inflation matters less than founders expect: a 15% rise in materials and packaging costs $26,250 here. The study runs these cases on the brewery's own numbers and states which assumption the conclusion depends on most.

What federal excise tax does a brewery pay?

A domestic brewer that produces no more than 2,000,000 barrels in a calendar year pays $3.50 a barrel on the first 60,000 barrels it removes; other barrels pay $16 up to 6,000,000 barrels and $18 above that [5]. A barrel is 31 gallons, and the tax applies at a like rate to other quantities and fractions of a barrel [5]. The tax is determined when beer is removed for consumption or sale [35].

Exhibit 15. Federal beer tax rules that enter the model

Source: 26 U.S.C. 5051, 5052, 5054 and 5061 (United States Code, 2024 edition); 27 CFR Part 25 (revised as of April 1, 2025).

Exhibit 16. Federal excise at sample annual volumes (reduced-rate brewer)

Source: calculated by FSC under 26 U.S.C. 5051(a) and 5061(d)(4), assuming production equals removals and no controlled group.

Two thresholds follow. At $3.50 a barrel, the $50,000 quarterly limit is reached at about 14,286 barrels, so many small breweries can file quarterly and need no bond; the $1,000 annual limit is reached at about 286 barrels. The model times each payment.

Ownership structure matters. A brewer that exceeds 2,000,000 barrels owes the difference, with interest, on every barrel it taxed at the lower rate that year [11]. Entities that produce beer under a license, franchise or other arrangement are treated as a single taxpayer [5], so a contract brewing plan must show whose 60,000 barrels it uses.

How do federal rules differ for distilleries and wineries?

They differ in the permit, the tax and the premises. A distillery or winery needs a basic permit under the Federal Alcohol Administration Act, which makes it unlawful, without one, "to engage in the business of distilling distilled spirits, producing wine" [37]. Brewing is not on that list; wholesaling malt beverages is [37][38], so a brewery's own distribution company would need a permit.

Exhibit 17. Federal rules for beer, wine and spirits producers compared

Source: 26 U.S.C. 5001, 5041 and 5051 (2024 edition); 27 U.S.C. 203 (2024 edition); 27 CFR Parts 1, 19, 24 and 25 (revised as of April 1, 2025).

The location rule matters most for a combined project. A distilled spirits plant may not be located "where beer or wine is produced" or "where liquors are sold at retail" [40], so a brewery that adds a still plans separate, separately registered premises and budgets for that separation. A craft distillery's first 100,000 proof gallons are taxed at $2.70 each, a fifth of the general rate [42], so its study is as sensitive to that tier as a brewery's is to the 60,000-barrel tier.

How do state excise taxes and three-tier rules differ?

Widely, and the differences change both the margin per barrel and which channels are legal. The five states below were sampled from statutes and agency pages fetched for this page; they are examples, not a survey.

Exhibit 18. Beer tax and distribution rules in five sample states

Source: Texas Alcoholic Beverage Commission and Texas Alcoholic Beverage Code ch. 62 and 62A; KRS 243.157, 243.720 and 243.884; N.C. Gen. Stat. 18B-1104 and 105-113.80; ORS chapters 471 and 473; Code of Virginia 4.1-206.1 and 4.1-236. Per-barrel values calculated by FSC (rate per gallon × 31). Virginia's statute states the rate as "per gallon per barrel".

North Carolina's tax, about $19.13 a barrel, is more than five times the federal reduced rate, while Kentucky's in-state brewer pays $1.25 a barrel after its 50% credit, plus a 10% wholesale sales tax that reaches microbreweries selling under their license [44]. The model applies each tax to the channel and party that owes it.

The three-tier system separates producers, wholesalers and retailers. In each of these five states the brewery license's default route to a bar or store runs through a licensed wholesaler; where their statutes allow direct sales to retailers (Texas, North Carolina and Kentucky), they cap them. A self-distribution plan has to show the license, the cap, and the trucks, drivers and receivables that come with it. A wholesale plan has to show a signed or likely agreement and how it can end under the state's law.

Beer excise in 10 more states

Rates were taken from each state's statute and converted to a 31-gallon barrel. Across all 15 sampled states they range from 62 cents to about $19.13 a barrel before any credit [34][47].

Exhibit 19. State beer excise as published and per barrel, 10 more states

Source: state statutes and agency pages as cited in each row. Per-barrel values for rates stated per gallon calculated by FSC (rate × 31).

Who pays matters as much as the rate. New York levies its tax on distributors [55], and Iowa on class A permittees, including beer a brewery sells at its own premises [50]. The model charges each tax to the barrels and party that owe it, then applies any credit, such as Minnesota's $4.60 a barrel on up to 25,000 barrels [53].

How are taprooms and brewpubs licensed by state?

Through a retail privilege attached to the production license, almost always with a cap on production, on-site sales or self-distribution that decides whether a plan's volumes are legal.

Exhibit 20. Taproom, brewpub and self-distribution rules in 10 more states

Source: state statutes as cited in each row; Texas, Kentucky, North Carolina, Oregon and Virginia appear in the five-state exhibit above. "Not authorized in the sampled sections" means the sections fetched for this page do not grant the right; it is not a finding that no other section does.

Florida's 10,000 kegs equal 5,000 barrels a year, and Massachusetts' 50,000-gallon cap is about 1,613 barrels (FSC calculations). A Massachusetts farmer-brewery plan with 2,500 self-distributed barrels, or a Maryland pub-brewery needing 2,500 barrels, fails on the statute before the market analysis.

The local layer sits on top: Minnesota's taproom license is issued by the municipality [63], and Nevada allows a brew pub only in redevelopment areas, historic districts, retail liquor stores or areas a county or city designates [66]. The study confirms both layers for the specific site.

What happens if a brewery wants to leave its wholesaler?

In most sampled states it cannot simply walk away. Franchise laws require good cause, notice and a chance to cure, and a few carve out small brewers.

Exhibit 21. Beer franchise and distribution agreement rules in 10 states

Source: state statutes as cited. Each law has further conditions and remedies; the study reads the full text for the state of the project.

For a lender this is a cash flow and collateral question. A brewery that signs in a strict franchise state gives up most of its ability to move the brand, and West Virginia binds an acquiring brewer to the seller's franchise agreements [76]. The study reads the signed or proposed agreement against the statute and models wholesale at the price it actually pays.

What licenses does a brewery need before it can sell beer?

Three layers: a federal Brewer's Notice, state licenses, and local land use, building and sewer approvals. None can be assumed.

Every brewer must file a notice before commencing business [77], on TTB Form 5130.10, and "A person may not operate a brewery until the notice required by this subpart has been approved" [11]. The brewery is the land and buildings described in that notice, unbroken except where separated by public passageways, streets, waterways or similar dividers [78], and it may be used only for beer and related purposes allowed by regulation [79]. Changes must be filed within 30 days [11].

Exhibit 22. The licensing path the study confirms

Source: 26 U.S.C. 5401, 5402, 5411 and 5414; 27 CFR Part 25 (revised as of April 1, 2025); state statutes and Austin Water, as cited.

The study lists every approval, its status and what depends on it, so the lender can tie draws or opening conditions to approvals rather than to a calendar.

What the Brewer's Notice, reports and labels require

The notice lists the persons interested in the business, describes each building, and names "the owner of the land or buildings comprising the brewery, and of any mortgagee" [11]. A lender financing the real estate will therefore appear in the brewer's federal file, and changes to the notice must be filed within 30 days [11]. Approval of the notice "will constitute the notice of registration of the brewery" [11].

Exhibit 23. Federal compliance items the study confirms and budgets for

Source: 27 CFR Parts 7, 13 and 25 (revised as of April 1, 2025).

Label rules for beer are narrower than many founders assume. Beer bottled for sale only within its home state needs no federal label approval: "Persons bottling malt beverages that will not be shipped or delivered for sale or shipment in interstate or foreign commerce are not required to obtain a COLA" [81]. For beer crossing state lines, the requirement applies only if the receiving state requires labels that conform to the federal rules [81]. The same limit runs through the federal trade practice law: the exclusive-outlet and tied-house rules reach out-of-state brewers' dealings with a state's retailers "only to the extent that the law of such State imposes similar requirements" [83]. A brewery planning interstate sales gets a list of the label approvals it needs and the state trade practice rules that apply.

What site and technical issues decide feasibility?

Zoning, wastewater, utilities and the building. A brewery is a small factory with a bar in front, and each use has its own rules.

Zoning and use. Zoning codes often treat beer production and a taproom as different uses, so the study confirms that the site allows both, along with the parking, hours and outdoor seating the plan assumes. Some state licenses tie the brewery to a land use: Virginia's limited brewery license applies to breweries making no more than 15,000 barrels a year on a farm on land zoned agricultural [31].

Wastewater. Austin Water describes fermentation wastewater as more heavily concentrated with solids and organic matter than residential wastewater, from grains, yeast, trub and hops, and as generally acidic [13]. Federal pretreatment rules set the outer limits, and the local sewer utility sets the working ones.

Exhibit 24. Wastewater rules at federal and local level (Austin example)

Source: 40 CFR 403.3, 403.5 and 403.8 (revised as of July 1, 2025); Austin Water, Fermented Beverage Producers.

The study estimates flow and strength from the brewing schedule, confirms the permit path, and prices the surcharge or pretreatment equipment (screens, a neutralization tank, cooling) into the budget.

What does a sewer surcharge cost?

It depends on volume, strength and the city's formula. Austin Water bills a monthly surcharge when wastewater exceeds normal strength of 200 mg/L for BOD and suspended solids and 450 mg/L for COD, using unit charges of $0.82 per pound of BOD, $0.77 per pound of suspended solids and $0.3644 per pound of COD above those levels [86]. The formula multiplies the excess strength by the volume billed and by 8.34 pounds per gallon; when COD is more than 2.25 times BOD, the COD charge replaces the BOD charge [86].

Exhibit 25. Illustrative monthly surcharge under Austin's formula (model assumptions)

Source: Austin Water, Pretreatment Surcharge Program, formula, normal-strength values and unit charges [86]. Volumes and strengths are FSC assumptions for illustration, not measurements of any brewery; surcharges are model results.

Doubling strength at the same volume more than doubles the bill, because only strength above normal is charged, so the study asks for the plan for spent grain, yeast and trub before it prices the sewer line; Austin tells producers that capturing yeast and keeping solids out of drains reduces surcharges [13]. A brewery large enough to be a Significant Industrial User also takes on federal reporting. Significant non-categorical industrial users "must submit to the Control Authority at least once every six months" a description of the nature, concentration and flow of their pollutants, and every industrial user must notify the treatment plant immediately of a discharge that could cause problems, including slug loadings [87]. The study budgets for that sampling and reporting.

Utilities. Breweries spent $217,940 thousand on 2,501,581 thousand kWh of electricity in 2022, about 8.7 cents per kWh, plus $135,063 thousand on fuels [14]. Tariffs vary far more by state than that average suggests.

Exhibit 26. Average electricity price to commercial and industrial customers, August 2026 (cents per kWh)

Source: U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A [88]. August 2026 values are preliminary estimates.

Utilities may classify commercial and industrial customers by NAICS code or by demand and usage under a rate schedule [88], so the study confirms which class the brewery falls in. On the commercial column, power cost about 2.7 times as much per kWh in Massachusetts (24.11 cents) as in Texas (8.96 cents) in August 2026. The study prices the boiler, refrigeration and glycol loads on the tariff the utility will actually apply, including demand charges.

The building. Tanks put heavy point loads on slabs, the brewhouse needs trench drains and floor slopes, and cold rooms and grain storage need space and access. The study cites the engineer's or supplier's figures for each and flags any that are missing.

Environmental review. SBA's list of environmentally sensitive industries names beverage manufacturing (NAICS 312) "except breweries, 31212" [10], so the code alone does not trigger it; the property's history still does.

Which financing paths fit a brewery or taproom?

Five paths cover most loans. The right one depends on the format's NAICS code, location, loan size, equity and how much of the cost is equipment.

Exhibit 27. Financing paths compared

Source: 13 CFR Part 120 (revised as of January 1, 2026); SBA SOP 50 10 8.1; 7 CFR Part 5001 (revised as of January 1, 2026); USDA FY 2026 OneRD notice, 91 FR 11272. USDA resets guarantee percentages each fiscal year; confirm with the State Office.

SBA 7(a)

The 7(a) loan is the most flexible path, covering real estate, machinery and equipment [90]. SBA's guaranty to one borrower is capped at $3,750,000 [8]. A mixed-use loan may take a blended maturity, or up to 25 years if 51% or more of proceeds go to real estate [10]. A start-up, a business operating for 1 year or less, needs equity of at least 10% of total project costs [10]. When a brewery is bought, the lender must secure transferable licenses conveyed in the purchase, and the SOP names a liquor license as an example [10].

SBA 504

SBA describes the 504 loan as "long-term, fixed rate financing for major fixed assets" [91]. A production brewery coded to NAICS 312120 is a small manufacturer if all its production facilities are in the United States, so its project can reach the $5,500,000 limit rather than $5,000,000 [8][10]. Small manufacturers also get a looser jobs test: one job opportunity per $150,000 guaranteed by SBA, against $95,000 for other projects [10]. A taproom or brewpub coded to 722410 or 722511 does not get either benefit. The CDC must decide whether the property is limited or special purpose and explain its conclusion; SBA's example list names wineries but not breweries [10], so the study gives the CDC the build-out, the alternative uses of the building and the cost to convert. Machinery and equipment financed by 504 need a useful life of at least 10 years [91].

USDA Business and Industry

B&I suits a brewery outside cities of more than 50,000 people and their contiguous urbanized areas [9]. The program's lists of ineligible projects in 7 CFR 5001.115 and 5001.118 do not name breweries or alcohol production [9]. For FY 2026 the guarantee is 85% on loans under $5 million and 80% from $5 million to $25 million [89]. A guaranteed loan above $1,000,000 to a new business requires a feasibility study by an independent qualified consultant acceptable to the Agency, with a scope the Agency sets [9]. Equity is at least 10% for an existing business, 25% for a new business whose lender wants the guarantee before construction is complete, and 20% for other new businesses [9].

Conventional loans and equipment finance

Bank terms come from each bank's credit policy, so the study is written to the strictest likely test. Brewhouses, tanks and canning lines can be financed separately; shorter equipment terms add early debt service, so the study models every loan and lease together and does not lean on resale value.

What SBA eligibility questions does a brewery raise?

Six come up repeatedly: occupancy, leased space, environmental review, buying an existing brewery, the liquor license as collateral and special purpose property.

Exhibit 28. SBA rules that most often shape a brewery or taproom loan

Source: SBA SOP 50 10 8.1, effective October 1, 2026, including Appendix 15; 13 CFR Part 120 (revised as of January 1, 2026).

The occupancy rule most often reshapes a plan: a brewery buying a building with room for a tenant must occupy at least 51% of it, or 60% if new [10], so the study measures space by use. Where the brewery leases, the lease length matters as much as the rent: for a 504 loan the lease term must equal or exceed the loan term [10].

Brewing itself raises no eligibility bar. The SOP's list of environmentally sensitive industries names beverage manufacturing "except breweries, 31212" [10], and nothing in the program's ineligible business list in 13 CFR 120.110 names alcohol production [8]. A credit officer tests saturation and the specialized property instead, and the study answers both with local evidence.

For the purchase of an operating brewery, the history becomes the evidence: reports of operations, excise returns and sales by channel, kept for at least three years [11], are reconciled with the financial statements, and the study supports SBA's separate business valuation [10] rather than replacing it. Licenses are refiled or amended, and wholesaler agreements may bind the buyer [76].

Can a farm brewery use USDA programs?

Yes: a Business and Industry guarantee for the loan, and a Value-Added Producer Grant for planning or working capital when farmers who grow its grain or hops own the brewery.

Exhibit 29. USDA Value-Added Producer Grant rules that decide a farm brewery's eligibility

Source: 7 CFR Part 4284, Subpart J (revised as of January 1, 2026); USDA Rural Business-Cooperative Service, FY 2024 Notice of Funding Opportunity. Current maximums are set in each year's notice under 7 CFR 4284.922(d).

The grant cannot build the brewhouse: construction and fixed processing equipment are unallowable [92], so the plant is financed with a loan. The planning grant pays a qualified consultant for "a Feasibility Study, Business Plan, and/or Marketing Plan" [92], and the rule defines a feasibility study as an analysis of "the economic, market, technical, financial, and management capabilities" of the project [92], the same five parts the B&I rule uses [9].

For the loan, B&I's rural location, equity and study tests are set out in the financing section above [9].

What must a brewery feasibility study contain?

1. A conclusion first: feasible, feasible with stated conditions, or not feasible, with the conditions or changes spelled out.
2. The project defined: format, primary NAICS code, system size, cellar, packaging, taproom seats and hours, and phasing, with SBA or USDA program fit.
3. The market: trade area, delivery range, and a supply survey of every brewery, taproom and bar, with density per resident.
4. Volume by channel: taproom demand from seats, hours and turns, plus self-distribution and wholesale volumes, each checked against the license, cap or agreement behind it.
5. Capacity: brewhouse, cellar, yield and utilization by year.
6. Revenue and costs by month through stabilization, from quotes, staffing by shift, utility tariffs and wastewater charges.
7. Federal and state excise by channel, with the return period and bond status.
8. Sources and uses, with contingency, interest during construction, working capital and reserves.
9. Licensing status: Brewer's Notice, state licenses, zoning, building and sewer permits.
10. Coverage by month and year at the program's threshold, with downside cases.
11. A management assessment covering brewing, taproom, sales and compliance experience.
12. Every source and assumption listed, with model outputs labeled as such.

What documents should a brewery founder gather?

The documents below let the study start with evidence rather than requests. Items that do not exist yet, such as a Brewer's Notice for a new brewery, are listed with their filing status instead.

Exhibit 30. Brewery feasibility study document checklist

Source: FSC checklist; the rule cited in each row.

How is a brewery feasibility study scoped and delivered?

Scope follows the capital source and the lender's questions, so the first step is a written list of the tests that apply. The study then runs in six stages.

1. Scoping: capital source, program, loan size, NAICS code, trade area and cases to model.
2. Document intake: the checklist above, with missing items flagged.
3. Field and market research: site inspection, supply survey, density and evidence for taproom and distribution volume.
4. Model: monthly by channel, with capacity, excise, wastewater, downside cases, coverage and reserves.
5. Review: the draft is checked against the lender's questions and the program rules, and revised only for new facts.
6. Final report: signed by Sarrah Allen, MAI, with written answers to the lender's follow-up questions. More about the practice is on the about page.

The deliverables are a report that leads with its conclusion, the exhibits behind every number, every source and assumption, base and downside cases with coverage in each, a licensing schedule and a document log. Where a fact could not be confirmed, the report says so and how the conclusion would change. Scope and timing for a brewery study are agreed in writing after the scoping call.

What happens after the loan closes?

The study becomes the lender's baseline, and most later data is already produced for regulators: the brewery files reports of operations monthly or quarterly [11], excise returns on the same calendar, and, if it is a Significant Industrial User, wastewater reports at least every six months [87]. Asking for those filings with the financial statements lets the lender compare actual barrels by channel with the projections and spot a shift toward wholesale early; a change of return period signals growth past $50,000 of annual federal beer tax [11]. If performance drifts, the model can be rerun on actual results.

Download the evidence behind this page's exhibits (CSV, 854 data points with sources)