How to Sell a Craft Distillery: Preparing Buyers and Their Lenders
Many buyers of a distillery finance part of the purchase, so a sale depends not only on finding the right buyer but also on that buyer’s lender being comfortable with the business. Owners who want to sell a craft distillery can improve their chances of a smooth closing by preparing the financial records, permit plan, inventory data, contracts and team that buyers and lenders will want to review.
This article is general guidance for owners of existing, operating craft distilleries. Every sale is different, and sellers should work with qualified attorneys, accountants, tax advisors and, where appropriate, business brokers or valuation professionals. Permit and distribution rules vary by state. Nothing here is legal, tax or financial advice.
Start Preparing Early
Time allows an owner to clean up records, resolve compliance questions, document inventory, reduce dependence on themselves and address facility issues that could concern a buyer or lender.
Organize the Financial Records
- Several years of tax returns and financial statements that reconcile with each other
- Sales by channel, product, state and major account
- A clear explanation of inventory accounting, prepared with your accountant
- Documentation for any personal or one-time expenses you expect a buyer to add back
- A complete schedule of existing debt and leases
Clean records help buyers and lenders verify earnings. Our guide to craft distillery valuation explains how those earnings are evaluated.
Plan for Permits
Because distillery permits and licenses generally do not transfer, buyers will need their own approvals. Sellers can help by organizing permits, required reports and compliance records and cooperating with the buyer’s applications. See our article on distillery permits and licenses.
Document the Inventory
Barrel-level records, finished goods counts and a clear account of tax status give buyers confidence in what they are paying for. Discrepancies between records and a physical count can delay a deal. Our article on aging spirits inventory explains what buyers review.
Organize Contracts
Gather distributor agreements, supply contracts, the lease and any private barrel or event commitments, and discuss with counsel whether the sale requires notices or consents.
Secure the Brand
Make sure trademarks, label approvals, domains and social media accounts are held by the business and that recipes and processes are documented. See our article on distillery brand and trademarks.
Reduce Owner Dependence
Buyers place more confidence in a distillery that can run without its owner. Developing a head distiller and tasting room manager, transferring distributor relationships and documenting processes may help.
Prepare for Due Diligence
Buyers will examine financial records, permits, inventory, contracts, stills and facility condition, fire and building code history, the brand and staff. Gathering these materials in advance can reduce delays. Our craft distillery due diligence checklist shows what buyers typically request.
Understand What Lenders Need From the Seller
The buyer’s lender may ask for information only the seller can provide, such as tax returns, inventory records and permit details. Some loan programs also have rules about the seller’s continuing involvement after closing. Responding completely helps keep financing on track, though timing depends on the lender and the transaction.
Consider Deal Structure
Sellers should consider whether they would accept part of the price over time or terms tied to inventory or performance. See our article on craft distillery seller financing and earnouts.
Protect Staff and Relationships
Premature news of a sale can unsettle employees, distributors and customers. Many sellers share information under confidentiality agreements and announce the sale when closing is near.
US Professional Funding helps qualified buyers finance the acquisition of existing, operating craft distilleries, which can help sellers reach a closing. Learn more about our craft distillery acquisition financing.
