How drinks makers, distilleries and breweries are using equipment finance

It might sound obvious, but having the right assets is critical if a distillery, brewery or other drinks producer is going to succeed and grow – there can be no shortcuts.

This does; however, come at cost – stills, bottling lines, and storage facilities do not come cheap.

One way to overcome these challenges is to use equipment finance, that lets you invest in essential machinery without the need for a large upfront payment - and you get the benefit of spreading repayments over time, helping preserve the cash in your bank account.

Equipment finance includes:

1. Hire purchase

Hire Purchase is a great way to get what you need because you get to choose, use and manage the assets you need over an agreed period, typically up to five years.

The regular instalments you pay as part of your agreement will cover:

• The asset's depreciation
• Interest on the cost of the asset

At the end of the term, you get to choose to buy the asset and own it outright.

2. Finance lease

Think of Finance Lease as a long-term rental for your equipment. Instead of buying it upfront, you pay rent to use it, with a flexible rental period to match your needs and cash flow fluctuations, which we know can change month-to-month. You cover the cost of the payments, including the agreed interest, for the duration of the rental period.

3. Operating lease

In common with Finance Lease, an Operating Lease lets you rent the asset for the duration you require it.

The main difference lies in the fact that an Operating Lease covers only a portion of the asset's total useful life meaning you pay a lower rental fee because it's calculated based on the difference between the asset's initial purchase cost and its residual value at the agreement's end.

You enjoy complete access to the asset for your required duration, without the obligation of managing its disposal or recovering its residual value.

Why use a specialist funder?

The right funding partner understands the complexities of distillery and brewing operations and can support you on your journey. A lender with deep knowledge of the sector, equipment, seasonality and compliance makes communicating quicker and easier.

They can offer the following:

• Tailored solutions for bespoke needs
• Industry expertise of asset valuation, depreciation, and the secondary market value of production equipment
• Supporting every stage of the journey from start-up to heritage distilleries

Getting the right finance in place

In an industry where quality, consistency and scale are vital, having the right equipment is non-negotiable. But that doesn’t mean it needs to come at the expense of your cash flow.

By using a specialist, drinks producers can finance equipment today and remain flexible for tomorrow’s business needs. If you’re looking to expand or upgrade, get in touch with our expert team to help turn your ambitions into reality.