In a perfect world, Joe “Craft” Brewer, an ambitious 38 year old who is about to expand his craft brewery by opening up a taproom, will enter his local bank, present the banker some of his great achievements and goals, and walk out with a fat check at a 6% interest rate, all in a matter of days. After all, Tim’s been a good customer for the bank for many years, his sales have consistently gone up, and that’s what banks are for... Right?
Not even close! Actually, that concept doesn’t even exist anymore. The reality is, however, Joe may not even find a business banker at his bank. And if he does, Joe will soon find out that a $38.00 cable bill that was sent to collections 9 years ago (still on his credit report) will negate him from obtaining a bank loan, maybe his credit score isn't 790, his cash flow ratios are not unrealistically high, or maybe Joe doesn’t necessarily feel like putting his house, personal assets, life insurance policy, wife, kids and golden doodle, up as collateral. Joe would be more than happy to sign over his mother in law, but that's pretty much the only collateral a bank doesn't ask for. Hypothetically speaking, even if Joe wanted to sign his wife, kids and pooch over to the bank, Joe would have to wait 2-8 months for a bank, or SBA loan to fund, after submitting an endless amount of documentation and coming up with up to 30% cash of the entire loan amount to inject into it. Because everyone has hundreds of thousands of dollars hiding under their mattress! Right? Of course, there are those who can benefit from the system, but there’s no doubt that major banks are more interested in doing business with a multi-million dollar massive scale brewery, rather than a local brewery, brewhouse, or taproom. As Bob Hope said, “a bank is a place that will lend you money if you can prove that you don't need it."
Discouraged by the bank’s less than warm attitude, Joe really doesn’t want to forgo the opportunity to expand on his dream and open a taproom in a growing brewery district. That corner spot for that price is not going to last long. For many brewery owners such as Joe, with the talent to capture opportunities but not enough scale or financial track record in using bank standards (less than one out of five small businesses are approved for loans), alternative financing is what bridges the gap; and LVRG leads the way in the craft brewery space. LVRG is in the middle of this spectrum, catering to growing breweries, with a focus on efficiency and moderate risk taking. In other words, we are picking up where banks leave off, which is a massive amount of America’s brewery owners. Often times, with a simple screening of bank statements and a one-page application, Joe is ready to put that $100,000 to good use; expecting a two, three, or five-fold ROI from his brewery expansion and taproom build-out. In other cases that require short-term loans quickly, such as to pay for the cost of goods (have a big deferred payment contract, for instance), brewery owners jump through significantly fewer hoops with reliable alternative financing companies.
Simply put, alternative financing options promote market efficiency by offering capital with relatively ease to shrewd craft brewery owners, allowing them to drive their brewery and dream to the next level. As for all the Joe’s out there fueling the “real” economy, alternative brewery financing from LVRG is the less hassle, reasonable, and sustainable option that fills the void. We're here to help, call (855) 998-5874 or click below!