How do you go about raising capital for you microbrewery or brewpub? Banks, SBA, Friends/Family, etc...
I'm an MBA student working on a business plan for a brewpub and wondering how most people got started.
All of the above...
But you should know that the SBA doesn't lend money. It's a common misperception, they only guarantee a portion of the loan for the bank. In the event you default the SBA pays that portion upfront to the bank and then subordinates behind the bank for liens and collateral.
Yes that is true...So you recieved funding from all the above? What was the % that you recieve from them? example: 25% bank, 75% Friends/family...
I just recieved funding for my restaurant which the bank & SBA looked upon as a real estate deal. I put in 10% SBA put in 40% and the bank put in the other 50%. The worst part about the process was making sure everyone had the paperwork that they needed. It took a few months to go from business plan to owning the building/fixtures and we will have renovations done over the next 2-3 months before we are able to open. Oh yeah, of the 10% I had to inject I paid 5% and my partner paid the other 5 and we had family a member gurantee the loan for the bank. You also need to be able to show that you have excess funds available if necessary. That is, if your project cost get out of control you need to have some equity or line of credit set up so that the project can still get off the ground and open up for business.
Thanks for taking the time to write a reply. The information was helpful.