How to Lease Canning Lines for Your Craft Brewery

What Is Canning Line Leasing?

Canning line leasing is a financial agreement where a brewery pays a lender a fixed monthly fee to use a canning line for a predetermined period. It is essentially a long-term rental contract for essential business equipment. Instead of purchasing the machinery outright with a large cash payment or a traditional loan, the brewery (the lessee) partners with a financing company like Crestmont Capital (the lessor), which purchases the equipment from the manufacturer on the brewery's behalf.

The brewery then gains full use of the canning line, from depalletizers and fillers to seamers and date coders, in exchange for regular payments. At the end of the lease term, the brewery typically has several options, such as purchasing the equipment, renewing the lease, or returning the equipment and upgrading to a newer model. This structure makes acquiring state-of-the-art packaging technology accessible and affordable, allowing breweries to scale production and expand their market reach without the financial strain of a large capital expenditure.

Unlike a traditional loan where the borrower owns the asset from the start, a lease separates the use of the equipment from its ownership. This distinction provides unique advantages related to cash flow management, technology updates, and budget predictability, making it an incredibly popular financing tool for businesses in capital-intensive industries like craft brewing.

Key Benefits of Leasing Canning Lines

Choosing to lease canning lines for your craft brewery offers a multitude of strategic advantages that go far beyond simply acquiring equipment. It's a financial strategy that can directly impact your cash flow, operational efficiency, and competitive edge.

• Preservation of Working Capital: Leasing requires minimal upfront cash, often just the first and last month's payment. This frees up your capital for other critical business needs like purchasing ingredients, marketing your brand, hiring staff, or managing day-to-day operational expenses.
• Access to Better Equipment: The high cost of top-tier canning lines can be prohibitive. Leasing allows you to acquire a more advanced, faster, and more reliable system than you might be able to afford to purchase outright, leading to higher quality packaging and increased production capacity.
• Predictable Monthly Payments: Leases come with fixed monthly payments over a set term. This makes budgeting and financial forecasting much simpler and more accurate, eliminating the unpredictability of fluctuating loan rates or unexpected capital costs.
• Flexibility and Scalability: The craft beer market evolves quickly. Leasing provides the flexibility to upgrade your equipment as your production needs grow or as new technology becomes available. At the end of your lease, you can easily transition to a larger or more efficient canning line without the hassle of selling old equipment.
• Simplified Application Process: Compared to traditional bank loans, which can involve extensive paperwork and long waiting periods, equipment lease applications are often much simpler and faster. At Crestmont Capital, approvals can often be secured in a matter of hours, not weeks.
• 100% Financing: Many lease agreements can be structured to cover the total cost of the equipment, including soft costs like shipping, installation, and training. This "100% financing" model further reduces your initial cash outlay.
• Competitive Advantage: By using the latest canning technology, you can improve product quality with lower dissolved oxygen levels, reduce waste, and increase throughput. This operational efficiency allows you to compete more effectively in a crowded market.

How Leasing a Canning Line Works

The process of leasing a canning line is designed to be straightforward and efficient, enabling you to get your equipment up and running as quickly as possible. While specific steps can vary slightly between lenders, the general framework follows a clear path from initial assessment to final installation.

Step 1: Determine Your Brewery's Canning Needs

Before you approach a vendor or a lender, you must first define your operational requirements. This is the most critical step, as it dictates the type and cost of the equipment you will lease. Consider factors such as your current and projected production volume, the can sizes you plan to use (12oz, 16oz, etc.), and the physical space available in your facility. Key specifications to determine include:

• Speed: Measured in cans per minute (CPM) or barrels per hour (BPH). A small startup might begin with a 15-30 CPM line, while a rapidly growing regional brewery might need a line capable of 60-100 CPM or more.
• Automation: Decide on the level of automation you need. Options range from manual systems requiring significant operator involvement to fully automated lines with automatic depalletizers, fill monitoring, and conveyance systems.
• Footprint: Measure the available floor space to ensure the canning line will fit comfortably within your production area.
• Ancillary Equipment: Don't forget necessary add-ons like date coders, labelers, and pack-out systems.

Step 2: Select Your Equipment and Vendor

Once you have a clear picture of your needs, you can research and identify equipment manufacturers and suppliers. Reputable vendors in the craft brewing space include companies like Wild Goose Filling, Cask Global Canning Solutions, and American Beer Equipment (ABE). Contact several vendors to compare features, pricing, and support. After selecting the ideal canning line, obtain a formal quote or invoice from the vendor. This document will detail the total cost of the equipment package, which you will need for your financing application.

Step 3: Apply for Lease Financing

With the equipment quote in hand, the next step is to apply for financing. This is where a dedicated business lender like Crestmont Capital comes in. The application process is typically fast and can often be completed online in minutes. You will need to provide basic information about your business, such as its legal name, time in business, and annual revenue, along with the vendor's quote. Our team specializes in capital equipment financing and understands the unique needs of the craft brewing industry.

Step 4: Review and Sign the Lease Agreement

After you submit your application, the lender will review your business's financial profile to determine approval and present you with financing options. This will include the lease term (e.g., 36, 48, or 60 months), the fixed monthly payment, and the end-of-term options (e.g., $1 Buyout or Fair Market Value). Carefully review the agreement to ensure you understand all the terms and conditions. Once you are satisfied, you will sign the documents electronically.

Step 5: Equipment Delivery and Installation

Upon receipt of the signed lease documents, the financing company will issue a purchase order to your chosen equipment vendor and pay them directly. The vendor will then schedule the shipment and delivery of your new canning line to your brewery. You can then proceed with the installation and begin packaging your beer for the market, making only the manageable monthly lease payments.

Types of Canning Line Leases Available

Not all equipment leases are created equal. They are structured to meet different business objectives, particularly concerning ownership of the asset at the end of the term. Understanding the primary types of leases will help you select the one that best aligns with your brewery's long-term financial strategy.

Fair Market Value (FMV) Lease

A Fair Market Value (FMV) lease is often referred to as an "operating lease." It functions like a true rental agreement. You pay to use the canning line for the lease term, and your monthly payments are typically lower than other lease types because you are only financing the depreciation of the equipment, not its full value.

At the end of the term, you have several choices:

• Purchase the equipment: You can buy the canning line for its determined fair market value at that time.
• Return the equipment: Simply return the machinery to the lessor with no further obligation.
• Renew the lease: You can extend the lease, often at a reduced monthly payment.

Best for: Breweries that want the lowest possible monthly payment and prefer to regularly upgrade to the newest technology. If you anticipate your production needs will change significantly in a few years, an FMV lease provides maximum flexibility.

$1 Buyout Lease (Capital Lease)

A $1 Buyout lease, also known as a capital lease or finance lease, is structured more like a traditional loan. The monthly payments are higher than an FMV lease because they are calculated to cover the full cost of the equipment plus interest over the term. The key feature is the end-of-term option: you can purchase the canning line for a nominal amount, typically just $1.

This type of lease is designed for businesses that intend to own the equipment at the end of the financing period. You build equity in the asset with each payment.

Best for: Breweries that are confident the canning line will serve their needs for many years to come and want to own the asset outright. If the equipment has a long useful life and is not subject to rapid technological obsolescence, a $1 Buyout lease is an excellent choice.

Sale-Leaseback Agreement

A sale-leaseback is a specialized financing solution for breweries that already own their canning line but need to generate working capital. In this arrangement, the brewery sells its existing equipment to a financing company like Crestmont Capital for an agreed-upon price. The financing company then immediately leases the same equipment back to the brewery for a fixed monthly payment.

The result is a significant cash injection for the business without interrupting operations, as the equipment never leaves the facility. The brewery can use the funds for expansion, debt consolidation, marketing, or any other business purpose.

Best for: Established breweries that have significant capital tied up in their existing equipment and need to improve liquidity. It's a powerful way to unlock the equity in your assets to fuel growth.

Who Qualifies to Lease Canning Lines?

Lenders evaluate several factors to determine a business's eligibility for an equipment lease. While specific requirements vary, the goal is to assess the brewery's ability to make consistent monthly payments over the lease term. At Crestmont Capital, we work with a wide spectrum of businesses, from brand-new startups to established, multi-state breweries.

Here are the primary criteria we consider:

• Time in Business: This is a key indicator of stability. While many lenders require a minimum of two years in operation, Crestmont Capital offers specialized programs for startups. Breweries that have been operating for six months or more often have access to a wider range of financing options.
• Credit Score: Both personal and business credit scores are reviewed. A strong credit history demonstrates financial responsibility and a track record of meeting obligations. However, a perfect score is not required. We offer financing solutions for business owners with bad credit as well, understanding that past challenges don't always reflect future potential.
• Annual and Monthly Revenue: Lenders look for consistent cash flow to ensure the business can support the additional monthly lease payment. Bank statements are often used to verify revenue and assess the financial health of the brewery. According to the U.S. Census Bureau, strong revenue is a primary indicator of a business's capacity to take on new financing.
• Industry Experience: For newer breweries, the owner's prior experience in the brewing or business management industry can be a significant positive factor. It demonstrates a deeper understanding of the market and operational challenges.
• Equipment Cost and Type: The value and type of the canning line itself can play a role. Because the equipment serves as collateral for the lease, assets that hold their value well can sometimes make it easier to secure financing.

It's important to remember that these factors are considered together. A newer business with strong revenue and an owner with extensive experience may qualify just as easily as an older business with moderate revenue. The best way to know what you qualify for is to complete a simple application.

How Crestmont Capital Helps Your Brewery Grow

Navigating the world of small business financing can be complex, but at Crestmont Capital, we make it simple. As the #1 rated business lender in the U.S., we are committed to providing the capital solutions that breweries need to thrive. Our expertise in equipment financing means we understand the specific challenges and opportunities within the craft beer industry.

When you partner with us to lease a canning line, you benefit from:

• A Streamlined Process: Our online application takes just a few minutes to complete. We've eliminated the burdensome paperwork and long wait times associated with traditional lenders.
• Fast Funding: We know that opportunities don't wait. Our technology-driven platform allows for rapid credit decisions, often within hours. This means you can get your equipment ordered and on its way to your facility without delay.
• Flexible and Customized Solutions: We don't believe in one-size-fits-all financing. Our dedicated financing advisors work with you to understand your brewery's specific goals and cash flow, structuring a lease that fits your budget and long-term strategy.
• High Approval Rates: We look beyond just a credit score, taking a holistic view of your business's health and potential. We are proud to help a wide range of businesses, including startups and those with challenged credit, secure the funding they need. Our clients' success stories, which you can read in our testimonials, speak to our commitment.
• Vendor Independence: We work with any equipment vendor you choose. This gives you the freedom to select the absolute best canning line for your needs, whether it's from a large international manufacturer or a specialized local supplier.

Our mission is to be more than just a lender; we aim to be a long-term financing partner for your brewery. From your first canning line to future expansions, Crestmont Capital is here to provide the capital you need to succeed.

Real-World Scenarios for Leasing Canning Equipment

To better understand the practical application of leasing, let's explore a few common scenarios faced by craft breweries and how a lease provides the ideal solution.

Scenario 1: The Startup Brewery Launching into Retail

The Situation: "Foam & Fable Brewing" is a new startup that has built a loyal following through its taproom. To grow, they need to get their flagship IPA and pilsner into local liquor stores and restaurants. They have a quote for a reliable, semi-automated 20 CPM canning line costing $85,000, but their startup capital is allocated for rent, ingredients, and initial marketing.

The Lease Solution: Instead of draining their cash reserves, Foam & Fable applies for an equipment lease. They are approved for a 60-month Fair Market Value (FMV) lease. Their upfront cost is minimal, allowing them to preserve their working capital for operations. The low monthly payment is easily covered by the new revenue generated from canned beer sales. At the end of the five years, they anticipate needing a faster line anyway, so the FMV structure gives them the perfect flexibility to upgrade.

Scenario 2: The Expanding Regional Brewery

The Situation: "Riverbend Ales" has been canning for three years and their distribution has expanded to three states. Their current 40 CPM line is running constantly, and they are struggling to meet demand from their distributors. They need to upgrade to a fully automated 100 CPM line, a significant investment of $275,000.

The Lease Solution: Riverbend Ales is confident this new line will be a workhorse for the next decade. They opt for a $1 Buyout lease. While the monthly payments are higher than an FMV lease, they are building equity in a critical asset. The financing allows them to immediately triple their canning capacity, meet all their orders, and take on new accounts. At the end of the term, they will own the high-capacity line for just $1, securing their production capabilities for years to come.

Scenario 3: The Brewery Shifting from Mobile Canning

The Situation: "Harbor Light Brewing" has been relying on a mobile canning service to package its beer. While convenient at first, the costs are adding up, and they are frustrated by the scheduling inflexibility, which limits their ability to do special, small-batch releases. They calculate that owning their own line would be more cost-effective and give them full control.

The Lease Solution: Harbor Light secures a lease for a compact, efficient canning line. The fixed monthly lease payment is less than what they were paying the mobile service on average. They now have complete control over their production schedule, allowing them to can beer whenever it's ready. This improves product freshness and enables them to launch a popular series of limited-edition canned beers, boosting both revenue and brand excitement.

Comparing Canning Line Financing Options

When you need to acquire a canning line, leasing is just one of several options. Understanding how it compares to other common financing methods, like SBA loans or traditional bank loans, can help you make the most informed decision for your brewery.

As the table illustrates, while SBA loans and bank loans can offer favorable interest rates, they come with significant hurdles in the form of strict qualifications, slow approval times, and high down payments. For most craft breweries, especially those needing to move quickly, an equipment lease offers an unparalleled combination of speed, flexibility, and capital preservation. For a more detailed look at equipment financing, our guide on Forklift Financing covers many similar principles.

How to Get Started with Your Canning Line Lease

Securing the financing for your new canning line with Crestmont Capital is a simple, four-step process designed to get you from application to operation as efficiently as possible.

Frequently Asked Questions

Expanding your brewery’s reach from the taproom to retail shelves is a critical step for growth. Acquiring a canning line is the key, but it doesn't have to be a capital-draining purchase. Equipment leasing offers a financially savvy path forward, preserving your cash, providing access to top-tier technology, and giving you the flexibility to adapt in a dynamic market. For any brewery looking to grow, the decision to lease canning lines craft a path to greater distribution and profitability. By partnering with a trusted lender, you can get the equipment you need quickly and focus on what you do best: brewing exceptional beer.

Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.