Good Morning. My name is Bill Campbell; I’m currently an Air Force Reserves and previous Active Duty Air Force supporting 1ID. I went to the Reserves a year ago to come home and start The New Buffalo Brewing Co. as my full time career. Since returning home it has taken nearly a year to get though the legal requirements to go into production. At this point I should go into production between March 15 and April 7th. I have 2 purchases orders from either end of the state and more distributors wanting to sing up. The production contract and vendors are place.
I went though the Small Business Development Center, finished my business plan, built the proforma and submitted to the bank. Eight months ago and they said how excited they were to fund this project once I had my federal and state approvals. When I came back with approval in hand the under writers said they weren't interested in the beer business. I went to a second bank and after nearly 3 months of giving them updated data and being bounced between different departments they only offered 25k as a personal loan rather then 100k business loan needed to go into full production. No where near the request 250k. All this time we have been bleeding capital waiting to go into production.
The money will be used for materials and the bank has said they will not count materials as collateral, finish beer as collateral or even our laboratory equipment. Leaving me with effectively no collateral. The SBA is now saying it's up to the bank.
At this point I have a few weeks to try and find another 75k. I have already run down the family and friends root and my entire life savings is already in the company. Leaving no ‘easy’ sources of funding left.
Do any of you know of angel investors or other groups I could seek out to get the remaining funding? I spoke with another guy about offering 2 year loans at 5%APR to people since we can’t offer stock to non-accredited investors. We tired Kickstarter a few months ago and that didn't work out.
I have been incorporated for nearly 3 years now and it was a long road to get here. I’ve been in bad spots before and we always managed to find a way though it. I’m trying to figure out how to do the same thing in the civilian world.
Any advice is appreciated.
Bill Campbell
Answers
Hello Captain,
Though I CANNOT offer my services to you through this forum and Consequently CANNOT take you on as a client, there are several avenues of revenue available to you their in New York. As you have found out banks are very flaky with new start ups no matter how you structure your company and no matter what the company does, in this day and age they are turning 90% of their customers away. Angel investors as previously stated expect a large return within the first few years of investment, Making it a Bang or Bust scenario that leaves you holding the bag. One of the options available to you is the SBA being a veteran this does give you a leg up on the process, though it is still a lengthy one i.e. 8 weeks. If worse comes to worse Google becomes your friend, please bear in mind I would not normally say that, but If you look up a guy named Phil Dushey their in New York he may be able to direct you better to where you can gain start up capitol for your business.
I have prodded around that area but I haven't been able to find how you contact Angels who are looking at non-tech related industries. The S&P number is very helpful, that would be around 25%. Thanks for the help.
I have. 2 raised the money though wealthy friends and family. Two were already a multimillionaire. One got 7 gentlemen to pitch in and the oldest one had set up as a S-Corp and sold the half of the company off, but they went under last year due to cash flow which has put a damper on the local micro-brew investing climate. There is a venture capitalist pitching session in 2 weeks I think I'll try but I'm not sure how to handle one of those. You get 180 seconds to pitch your product.
Have you researched how other micro-breweries have been financed?
I reached out to the New York State Business Development Corp but they want to fund capital projects like real estate or equipment. I just called the Economic Develop group at the Capital and they said they would get back to me. They really want to fund high-tech things, not so keen on wonderful beer.
Many States have economic development programs that offer cash or low interest incentives. have you tried them?
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