Vineyard finance

Through bad times and good times, there’s one thing you can be sure of – South Africa still loves a glass of wine.

Despite significant drops in production and consumption in the first year of the pandemic, South African wine sales are now forecast to grow by 4.6% in 2025. However, even as sales rise, costs are rising too, leaving many wine growers struggling to modernise their facilities, expand their area under vines, and pay ballooning overhead. Fortunately, this is where vineyard finance can come to the rescue: From commercial mortgages to startup loans and working capital finance, vineyard loans are available to solve every grower’s need. 

Don’t let financial issues sour your winemaking ambitions. Read on to find the best loan for your vineyard.

What types of loan are available for vineyards

No matter if you’re seeking to expand production, pay taxes, start a vineyard, or buy property, there’s a vineyard loan for you.

Commercial land mortgage

Wine growing is a land intensive business, but in South Africa, even agricultural land can be expensive. This means wine growers who wish to buy an existing vineyard or buy raw land to plant new vines will typically need finance for the transaction. Unlike residential home loans, where one size often fits all, commercial mortgages are tailored to the unique demands and business of the borrower. Borrow up to 90% of the LTV (loan to value – a comparison of the size of the loan against the value of the property) and repay over 1 – 30 years. The property acts as security for the mortgage. In most cases, there is no need to provide extra collateral.

Expansion

Development and bridging loans can make dreams to grow your vineyard become a reality. Refurbish, extend, expand your current production facilities. Borrow up to 90% of the project cost. Repay over 1 – 30 years. The property acts as security. In most cases there is no need to provide extra collateral.

Start a vineyard

South Africa has seen explosive growth in the number of vineyards over the past eight years. Despite the pandemic, statistics show that more entrepreneurs are willing to try their hand at viniculture. Budding wine growers seeking to launch their own vineyard or winery may get a financial boost with a startup loan – hard-to-find seed cash to get a new business off the ground. Government funds may also be available for this type of loan. 

Asset finance

Making fine wine doesn’t come cheap. Vineyard and winery equipment can be expensive and to keep on top of expanding consumer tastes, wine growers must continually modernise to stay ahead of the competition. Asset finance can take the sting out of buying big-ticket plant and machinery. Buy over time and use the equipment as you pay for the equipment. The asset acts as security for the loan. In many cases, there is no need to provide extra collateral.

Working capital loans

The hospitality trade can be very seasonal – with sales of wine rising and falling throughout the year as events like Christmas turbo-charge consumption. Unfortunately, erratic sales can cause cashflow headaches for wine growers and wineries, as customers reduce orders, but overhead costs remain the same. Working capital loans can be used to cover everyday expenses – wages, utility bills, the cost of raw materials and more. Depending on the type of loan you choose, added security may be required. 

Working capital loans for vineyards:

Franchise finance

Buying into a successful winery franchise can be a good idea – you become part of a well-known brand, enjoy centralised marketing support, and have easy access to products and equipment. However, joining a major winery franchise group can be costly, and few franchisors offer funding to soften the financial blow. An independent franchise loan can solve this problem. Borrow anywhere from R1,000 to R5million. Repay over months or years. Additional security may be required.

How to find the right funding for your vineyard

Vineyard financing is a niche funding area, with differing rules of application. Wine growers seeking this type of finance may find themselves forever searching and making applications to lender after lender. The delays this can create could cause you to lose business and leave your vineyard vulnerable to the competition. Instead, working with a broker, who can access vineyard loans and mortgages from a wide range of lenders is a better way to go. No more cold calls and endless demands for information. Even if you’ve been turned down elsewhere or have bad credit, simply tell us what you need and leave the rest to us. 

What is required to get funding

Vineyards are specialist commercial operations, with features unlike any other type of business. If you are seeking funds to buy land, an existing vineyard, or to launch a winery, the lender will need full details of the property, crop output, customer agreements, and a detailed business plan. Past experience in viniculture, or the manufacture and sale of other alcoholic beverages is useful, although not mandatory. Additional to these core requirements, and for other types of vineyard loan, most lenders will seek the following information:

  • Most recent three-years bank and tax records. (Business account if you are an established vineyard owner, personal account for entrepreneurs launching their first wine business).
  • Cashflow forecast.
  • Profit and loss statement and recent balance sheet. (Established vineyards and wineries).
  • Details of any existing debt.
  • List of major customers and suppliers.
  • List of any assets, such as property or inventory.

Top Tip: Some lenders may ask for a personal guarantee by the business owners or directors to secure the loan. If they do, they will check their personal credit scores. Don’t get caught out by an error on your credit report, always check your business and personal credit scores before you apply.

Get started with Swoop

Give your vineyard the funds it needs to thrive. Register with Swoop to find the best rates, the best terms and the best vineyard loans and mortgages. 

Testimonials

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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