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                                                                EXHIBIT 10.17

                   AMENDMENT NO. 3 TO BUSINESS LOAN AGREEMENT
                                       
     This Amendment No. 3 (the "Amendment") dated as of March 28, 1997, is
between Bank of America NT & SA (the "Bank") and Portland Brewing Company (the
"Borrower").

                                   RECITALS

     A.   The Bank and the Borrower entered into a certain Business Loan
Agreement dated as of December 15, 1995, as previously amended (the
"Agreement").

     B.   The Bank and the Borrower desire to further amend the Agreement.

                                   AGREEMENT

     1.   DEFINITIONS.  Capitalized terms used but not defined in this
Amendment shall have the meaning given to them in the Agreement.

     2.   AMENDMENTS.  The Agreement is hereby amended as follows:

          2.1  Article 1 of the Agreement is amended to read in its entirety as
follows:

               1.   DEFINITIONS

               In addition to the terms which are defined elsewhere in this
               Agreement, the following terms have the meanings indicated for
               the purposes of this Agreement:
               
               1.1  "BORROWING BASE" means the lesser of:
               
               (a)  One Million Dollars ($1,000,000); or
                    
               (b)  the sum of:
                    
                    (i)  75% of the balance due on Outstanding Trade
                         Receivables net of the allowance for doubtful
                         accounts; and
                         
                    (ii) 50% of the value of Inventory consisting of finished
                         goods, work in process and raw materials (not
                         including packaging supplies).
                         
               In determining the value of Inventory to be included in the
               Borrowing Base, the Bank will use the lowest of (i) the
               Borrower's cost, (ii) the Borrower's estimated market value, or
               (iii) the Bank's independent determination of the resale value
               of such inventory in such quantities and on such terms as the
               Bank deems appropriate.
               
               1.2. FACILITY NO. 1:  LINE OF CREDIT AMOUNT AND TERMS
                    
               1.3  LINE OF CREDIT AMOUNT.
                    
               (a)  During the availability period described below, the Bank
                    will provide a line of credit to the Borrower.  The amount
                    of the line of credit (the 

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               "Facility 1 Commitment") is equal to the amount of the Borrowing
                Base.

               (b)  This is a revolving line of credit.  During the
                    availability period, the Borrower may repay principal
                    amounts and reborrow them.  If such outstandings exceed the
                    Facility 1 Commitment, the Borrower will immediately pay
                    the excess to the Bank upon the Bank's demand.  The Bank
                    may apply payments received from the Borrower under this
                    Paragraph to the obligations of the Borrower to the Bank in
                    the order and manner as the Bank, in its discretion, may
                    determine.
                    
               (c)  The Borrower agrees not to permit the outstanding principal
                    balance of the line of credit to exceed the Facility 1
                    Commitment.
                    
               1.4  AVAILABILITY PERIOD.  The line of credit is available
                    between the date of this Agreement and May 1,1997 (the
                    "Expiration Date") unless the Borrower is in default.
                    
               1.5  INTEREST RATE.
                    
               (a)  Unless the Borrower elects an Optional interest rate as
                    described below, the interest rate is the Reference Rate.
                    
               (b)  The Reference Rate is the rate of interest publicly
                    announced from time to time by Bank of America National
                    Trust and Savings Association ("BofA California") in San
                    Francisco, California, as its Reference Rate.  The
                    Reference Rate is set based on various factors, including
                    BofA California's costs and desired return,
                    general-economic conditions and other factors, and is used
                    as a reference point for pricing some loans.  The Bank may
                    price loans to its customers at, above, or below the
                    Reference Rate.  Any change in the Reference Rate shall
                    take effect at the opening of business on the day specified
                    in the public announcement of a change in the Reference
                    Rate.
                    
               1.6  REPAYMENT TERMS.
                    
               (a)  The Borrower will pay interest on January 1, 1996, and then
                    monthly thereafter until payment in full of any principal
                    outstanding under this line of credit.
                    
               (b)  The Borrower will repay in full all principal and any
                    unpaid interest or other charges outstanding under this
                    line of credit no later than the Expiration Date.
                    
               1.7  OPTIONAL INTEREST RATES.  Instead of the interest rate
                    based on the Reference Rate, the Borrower may elect to have
                    all or portions of the line of credit (during the
                    availability period) bear interest at the rate(s) described
                    below during an interest period agreed to by the Bank and
                    the Borrower.  Each interest rate is a rate per year.
                    Interest will be paid on the first day of every month and
                    on the last day of each interest period.  At the end of any
                    interest period, the interest rate will revert to the rate
                    based on the Reference Rate, unless the Borrower has
                    designated another optional interest rate for the
                    portion.

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<PAGE>

               1.8  OFFSHORE RATE.  The Borrower may elect to have all or
                    portions of the principal balance of the line of credit
                    bear interest at the Offshore Rate plus 2.00 percentage
                    points.
                    
               Designation of an Offshore Rate portion is subject to the
               following requirements:
               
               (a)  The interest period during which the Offshore Rate will be
                    in effect will be no shorter than 30 days and no longer
                    than 180 days.  The last day of the interest period will be
                    determined by the Bank using the practices of the offshore
                    dollar inter-bank market.
                    
               (b)  Each Offshore Rate portion will be for an amount not less
                    than Five Hundred Thousand Dollars ($500,000).
                    
               (c)  The "Offshore Rate" means the interest rate determined by
                    the following formula, rounded upward to the nearest 1/100
                    of one percent.  (All amounts in the calculation will be
                    determined by the Bank as of the first day of the interest
                    period.)
                    
                         Offshore Rate  =      Grand Cayman Rate
                                          ---------------------------
                                          (1.00 - Reserve Percentage)
                                     
               Where,

                    (i)  "Grand Cayman Rate" means the interest rate (rounded
                         upward to the nearest 1/16th of one percent) at which
                         the BofA California's Grand Cayman Branch, Grand
                         Cayman, British West Indies, would offer U.S. dollar
                         deposits for the applicable interest period to other
                         major banks in the offshore dollar inter-bank market.
                         
                    (ii) "Reserve Percentage" means the total of the maximum
                         reserve percentages for determining the reserves to be
                         maintained by member banks of the Federal Reserve
                         System for Eurocurrency Liabilities, as deemed in the
                         Federal Reserve Board Regulation D, rounded upward to
                         the nearest 1/100 of one percent.  The percentage will
                         be expressed as a decimal, and will include, but not
                         be limited to, marginal, emergency, supplemental,
                         special, and other reserve percentages.
                         
               (d)  The Borrower may not elect an Offshore Rate with respect to
                    any portion of the principal balance of the line of credit
                    which is scheduled to be repaid before the last day of the
                    applicable interest period.
                    
               (e)  Any portion of the principal balance of the line of credit
                    already bearing interest at the Offshore Rate will not be
                    converted to a different rate during its interest period.
                    
               (f)  Each prepayment of an Offshore Rate portion, whether
                    voluntary, by reason of acceleration or otherwise, will be
                    accompanied by the amount of accrued interest on the amount
                    prepaid, and a prepayment fee equal to the amount (if any)
                    by which

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                     (i) the additional interest which would have
                         been payable on the amount prepaid had it not been paid
                         until the last day of the interest period, exceeds
                         
                    (ii) the interest which would have been recoverable by the
                         Bank by placing the amount prepaid on deposit in the
                         offshore dollar market for a period starting on the
                         date on  which it was prepaid and ending on the last
                         day of the interest period for such portion.
                         
               (g)  The Bank will have no obligation to accept an election for
                    an Offshore Rate portion if any of the following described
                    events has occurred and is continuing:
                    
                    (i)  Dollar deposits in the principal amount, and for
                         periods equal to the interest period, of an Offshore
                         Rate portion are not available in the offshore Dollar
                         inter-bank market; or
                         
                    (ii) the Offshore Rate does not accurately reflect the cost
                         of an Offshore Rate portion.
                         
          2.2  Paragraph 9.2 of the Agreement, is amended to read in its
entirety as follows:

               9.2  FINANCIAL INFORMATION.  To provide the following financial
                    information and statements and such additional information
                    as requested by the Bank from time to time:
                    
               (a)  Within 120 days of the Borrower's fiscal year end, the
                    Borrower's annual financial statements.  These financial
                    statements must be audited by a Certified Public Accountant
                    ("CPA") acceptable to the Bank.
                    
               (b)  Within 30 days of the period's end, the Borrower's monthly
                    financial statements.  These financial statements may be
                    Borrower prepared.
                    
               (c)  Within 30 days of the period's end, the Borrower's
                    quarterly compliance certificate.
                    
               (d)  A borrowing certificate setting forth the respective
                    amounts of Outstanding Trade Receivables and Inventory as
                    of the last day of each month within twenty (20) days after
                    month end.
                    
               (e)  Statements showing an aging of the Borrower's receivables
                    within twenty (20) days after the end of each month.
                    
               (f)  A statement showing an aging of accounts payable within
                    twenty (20) days after the end of each month.
                    
               (g)  A summary inventory listing within twenty (20) days after
                    the end of each month; the listing must include a valuation
                    of inventory by category.  Categories to include raw
                    materials (net of packaging supplies), finished goods and
                    work in process.

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<PAGE>

          2.3     Paragraph 9.3 of the Agreement, is amended to read in its
entirety as follows:

               9.3  CURRENT RATIO.  To maintain at the end of each quarterly
                    accounting period a ratio of current assets to current
                    liabilities of at least the amounts indicated for each
                    period specified below:

<TABLE>
<CAPTION>
                    Period                       Ratio
                    ------                       -----
                    <S>                          <C>
                    March 31, 1997,
                    and June 30, 1997            0.80:1.0
                    
                    September 30, 1997           0.90:1.0
                    
                    December 31, 1997,
                    and quarterly thereafter     1.00:1.0
</TABLE>
                    
          2.4  Paragraph 9.4 of the Agreement, is amended to read in its
entirety as follows:

               9.4  TOTAL LIABILITIES TO TANGIBLE NET WORTH.  To maintain at
                    the end of each quarterly accounting period a ratio of
                    total liabilities to tangible net worth not exceeding
                    1.0:1.0.
                    
               "Tangible net worth" means the gross book value of the
               Borrower's assets (excluding goodwill, patents, trademarks,
               trade names, organization expense, treasury stock, unamortized
               debt discount and expense, deferred research and development
               costs, deferred marketing expenses, and other like intangibles)
               less total liabilities, including but not limited to accrued and
               deferred income taxes, and any reserves against assets.
               
          2.5  Paragraph 9.5 of the Agreement, is amended to read in its
entirety as follows:

               9.5  CASH FLOW RATIO.  To maintain a cash flow ratio of at least
                    the amounts indicated for each period specified below:

<TABLE>
<CAPTION>
                    Period                       Ratio
                    ------                       -----
                    <S>                          <C>
                    June 30, 1997, and
                    September 30, 1997           1.35:1.0
                    
                    December 31, 1997,
                    and quarterly thereafter     1.50:1.0
</TABLE>

               "Cash flow ratio" means the ratio of cash flow to current 
                portion of long term debt. "Cash flow" is defined as net 
                income after taxes, plus depreciation and amortization, less 
                unfunded capex.  "Unfunded capex" is defined as capital 
                expenditures not funded by either bank debt or equity 
                proceeds.  This ratio will be calculated at the end of each 
                fiscal quarter, using the results of that quarter and each of 
                the 3 immediately preceding quarters.  The current portion of 
                long term debt will be measured as of the last day of the 
                most recent quarter end.

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          2.6 Paragraph 9.20 is added to the Agreement, to read in its 
entirety as follows:

               9.20 OPERATING INCOME.  Borrower will not allow cumulative
                    operating income to be less than the amounts indicated for
                    each period specified below:
                    
                    Period                   Amount
                    ------                   ------
                    
                    March 31, 1997           -$200,000
                    
                    June 30, 1997            -$50,000
                    
                    September 30, 1997,
                    and December 31, 1997    $0
                    
     3.   EFFECT OF AMENDMENT.  Except as provided in this Amendment, all of
the terms and conditions of the Agreement shall remain in full force and
effect.

     This Amendment is executed as of the date stated at the beginning of this
Amendment.

BANK OF AMERICA NT & SA            PORTLAND BREWING COMPANY


/s/ x Ed Kluss                      /s/ Charles Adams
----------------------------       ---------------------------------
By:     Ed Kluss                    By:     Charles Adams
Title:  Vice President              Title:  President


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