EDITOR’S NOTE: The news from lenders has never been more positive. As you will see in author Ben Narasin’s introductory article and the multiple interviews that follow, financial institutions are eager to lend to the wine industry and have aided the ongoing consolidation of vineyards and wineries through mergers and acquisitions. 

Since we started our annual Wine Industry Finance report in 2012, we have seen the classic pattern of cyclicality that remains the norm for all finance industries over time. That inaugural year was defined by the seasonal shift from financial summer to winter created by the post-crash realities of the Great Recession: scarce capital, an exceptionally tight lending environment, huge spreads between buyer and seller expectations on the mergers and acquisitions (M&A) front and the exit of fair-weather lenders and buyers that had become active and optimistic in the heady days that preceded the crash.

The following year (2013) brought a gradual warming among stalwart lenders and long-term players in the wine space, but there was still an overall conservatism with loans available only to the optimal credit customer.

The year 2014 ushered in a financial spring and a broader openness to lending, while also increasing acquisition activity as a means to control (and add to) grape supply or to further fill out a portfolio of brands.

In our most recent report, 2015 brought about full summer, with banks competing aggressively on terms to lend to the best credits and opening their underwriting to cover a broader range of borrowers.

So it is of little surprise that we enter the third quarter of 2016 looking back over a year of summer-like heat in the finance space. Rates remain low, competition for loans among banks remains high, and according to our finance expert panel member Jason Hinde of Exchange Bank, “Debt is out there for nearly anyone looking for it right now.”

M&A consolidation across all categories—from the three-tier players to vineyard land—has continued in earnest this past year, according to our experts, with the big continuing to get bigger and the concentration of power increasing toward a wealth gap that could leave niche players in a challenging position in years ahead.

Real estate prices also have continued their steady march upward, with pricing logically tied to the value of the grapes produced, and lenders happy to finance the acquisitions.

Whether this financial optimism and free-flowing capital are traits that indicate we are at the top of the market or solidify the return to a healthy market is uncertain, but the recent trauma of the Brexit, which some of our expert panel address, and the pending uncertainty of the U.S. presidential race point out that cyclicality and seasonality in finance is an eternal construct, and past is often preamble.

Based on the past we’ve seen and documented during the past five years, one might favor making hay while the sun shines. One cannot time or top the market, but it seems clear from all our experts that now is an exceptional time to lock in long-term loans at advantageous rates, and there is growing concern that we may be at, or close to, a top of the market.

In the case of larger well established brands and vineyards producing premium product, timing may also be optimal for exits through M&A. As always, smaller niche producers may have a much harder time on the M&A front, though credit appears readily available to all.

One difference in this high market moment from those past, according to our experts, is the relatively modest arrival of new lenders and acquirers. One can hope that even if the good times can’t continue at the levels currently on display, the entrenched and experienced lenders and buyers may be more likely to weather any unforeseen financial storms.

On the unforeseen front, the recent Brexit vote in the United Kingdom certainly qualifies, and it put global markets in a spin. As to whether and when the Brexit will impact wine finance stateside, our experts seem to feel its too early to tell, and likely a good way off.

One Brexit silver lining may be that the low interest rates we’ve enjoyed for so long may remain that way for a bit longer. The Fed no longer seems motivated to raise rates as they had previously indicated before the vote. There’s been at least a bit of a near-term Brexit bonus in the form of interest rates moving meaningfully lower in the days after the Brexit compared to the days before.

Still, unexpected upheavals in other parts of the world have derailed U.S. markets before. Those considering new funding now—versus awaiting better times later—may benefit from a bit of “hope for the best, but plan for the worst” advance planning.

It’s unlikely, now or ever, that “it’s different this time,” so look to the opportunity currently represented as just that—an opportunity—not a long-term prediction of the future. Enjoy the financial warmth being provided while it is still around, as most seem to feel there’s a downturn on the horizon.

Ben Narasin is a venture capitalist and freelance wine journalist. His work has appeared in the San Francisco Chronicle, Wine Enthusiast and other media outlets.