Growing your craft brewery15th June 2017
No matter which part of the UK you’re situated in, if there’s one thing that unites us all it’s the love of a quality beer. But even if you’d sooner sit down to a mug of brown ale or a shot of whisky after a long day, we can all give that a nod of approval too. But for some entrepreneurs, their love of alcoholic beverages may go beyond just downing a couple of pints. They may have their own taste in liquor and now want to share their take on a much-loved favourite with the wider public by setting up their own craft brewery.
If you’re the proud owner of an SME brewery there’s great news to be had. Thanks to a sharp surge in popularity for craft beverages, many big name brands are losing long-held ground to SME craft producers. So if you can offer both quality and a unique taste, well friend, it’s time to expand production. But to do so you’re going to need more high-quality equipment. You’re going to need more distilleries, filters, automatic keg and bottle filling lines, fermentation conditioning tanks, label printers and so on. If you’re in, Rangewell can help you step things up two levels. It’s time to switch from a pint glass and go all in for a filled-to-the-brim pitcher with Asset Finance.
Asset Finance for your craft brewery
If you want to deliver your goods to a larger demographic of fellow beverage lovers, fitting out your brewery with more brewing equipment is a must. However, just like in any UK sector, acquiring the highest quality equipment on the market is expensive. As the business owner, you might not have the capital at hand or risk parting with large sums and causing long-term harm to your finances. But, there is an alternative – Asset Finance.
Asset Finance is an extremely popular finance package for many UK sectors, offering business owners a less strenuous means of acquiring all the equipment they need. By choosing Asset Finance for your brewery you could spread the cost of essential assets over a term of up to 7 years, making acquisitions far more affordable and less painful. Plus, depending on the finance product and the asset you choose, you will be able to recover any VAT outlay as well as enjoy tax benefits. Just be sure to discuss this with your business accountant before entering any agreements.
Asset Finance is a collection of highly specialised finance products including Leasing Agreements, Hire Purchase, Asset Refinance and more!
Leasing Agreements allow you to have the use of an asset for an agreed period, saving you from the burdens of ownership. Agreed terms typically last up to 5 years, although 7 years can be accommodated subject to the value of the equipment. However, there are two types of lease on the market and it’s imperative that you understand them in order to get the most appropriate product that caters to your business’ precise needs.
- Operating: leases are a popular method of temporarily securing the services of vital equipment for a fixed monthly payment, plus interest. Such agreements are designed to cover only a portion of the asset’s working life. This finance solution works by the lender purchasing the asset in question and offering a fixed monthly payment for an agreed term. Payment costs take into account both the usage of the machine during the contracted periods as well as the future predicted value at the end of the contract. At end of the term, subject to terms and conditions, generally, you’re free to either extend the lease, hand back the asset or upgrade to a higher quality model.
- Finance: leases, on the other hand, cover the majority or entire working life of the concerned asset. You will also be required to accept certain responsibilities regarding maintenance, repairs, registration, administration and so on. Again, you are only securing the usage of the equipment for an agreed term in exchange for a fixed monthly repayment, which includes both capital and interest. Once the agreement has elapsed you are free to return, extend the agreement or possibly purchase the asset from the lessor subject, of course, to their terms and conditions.
Hire Purchase is a great method of finance for many business owners since it allows you to eventually become the asset’s owner. What’s so attractive about this method of finance is it that allows you to spread the asset’s total cost over a period of time, instead of forcing you to part with a large one-off payment. How Hire Purchase solutions work is by a financier purchasing the equipment from a supplier on your behalf, then letting you use it whilst complying with fixed monthly repayments, which include a combination of capital and interest. However, before you can access the machinery you must first pay the lender an ‘initial deposit’ or lump sum. This covers full VAT and is usually more or less 10% of the asset’s total cost, although this is negotiable depending on the circumstance. Once the deposit has been paid you’ll be required to pay fixed monthly repayments that are calculated using the length of the term, money costs and the sum borrowed. At the end of the term, ownership of the asset is transferred to you providing all repayments have been made.
Asset Refinance allows you to unlock the value tied up in any of your existing and unencumbered assets. This is a great way to raise cash for your business without relying on your bank, allowing you to purchase new brewing equipment, fund larger premises and more. Technically a type of Secured loan agreement, as the funder takes security in the assets, terms can typically range up to 5 years during which you will be required to pay a fixed monthly payment, which is a combination of capital and interest. As such, should you fall behind in making your fixed monthly payments the finance lender can seize the assets in order to recover the remaining costs. At the end of the term and once the finance has been fully repaid, ownership of the asset is returned to you.
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