Stonecutter Spirits Secures SBA Loan

Stonecutter Spirits, a member of the Addison County Economic Development Corporation (ACEDC), was awarded a U.S. Small Business Administration (SBA) 7(a) loan last spring to expand their operations and build out new distillation equipment at their Middlebury location. Sas Stewart, Stonecutter Spirits Co-Founder, President & ACEDC Board member, indicated that "we are committed to driving employment and economic development in our community, and can't wait until we get to flip the on switch with our new equipment!”  

The U.S. Small Business Administration (SBA) supported $44,780,792 in loans to VT small businesses during the last fiscal year (FY '18) of the U.S. Government from October 1, 2017, to September 30, 2018. VT increased its loan amount by 11% compared to the previous fiscal year when it guaranteed $40,341,365 million in loans. Of that, 16% supported the VT adult beverage industry including beer, spirits and cider. Craft beverage loans are often guaranteed by the SBA because equipment used for brewing & distilling can be expensive & large, and spacious accommodations are needed to house the equipment.

The SBA works with lenders to provide small business loans. It doesn’t lend money directly to entrepreneurs. It sets guidelines for loans made by SBA-certified lenders and then guarantees a considerable portion of the loan, sometimes up to 90%. The guarantee reduces risk, incentivizing lenders to make more small business loans.

A wide array of VT industries obtained SBA loans in FY18, including sporting goods stores, legal practices, software companies and restaurants. However, the industry that benefitted the most was the VT craft beverage industry. Breweries, distilleries and cideries received $7,089,500 in funding, 16% of the $44,780,792 SBA VT portfolio. Throughout the year, 15 different VT craft beverage companies from 10 towns received SBA funding.

Craft beverage industry funding was provided through SBA’s two primary loan programs, the 7(a) and 504 programs. The 7(a) Loan Program is the most common SBA loan and is used for equipment, inventory & working capital.

The SBA’s two other programs are Community Advantage and microloans. Community Advantage loans are offered to undeserved communities through approved community-based lenders. The VT 504 Corporation made 11 Community Advantage loans worth $1,103,000. Microloan intermediaries administer the SBA Microloan Program by providing direct loans up to $50,000 to small business owners who lack the collateral or credit history to qualify for a traditional bank loan. 

For more info about SBA loans in VT, contact the district office HERE.

Barrels of Stonecutter Spirits