San Antonio—Central South Texas Edition 2020—U.S. Small Bus…

FUNDING PROGRAMS

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Solution Thanks to guidance from an SBA Resource Partner, the Small Business Development Center at Yavapai Community College, Jennifer and Jeff learned about financing that worked for them. The SBA guarantees loans made by lending institutions to small business that would not otherwise be able to obtain financing. Their small business qualified for two SBA-backed loans totaling more than $600,000. The Herberts’ first SBA-backed loan allowed them to acquire commercial property to design and build their mead production facility. Their second SBA-backed loan provided the funding for professional brewing equipment to complete their 7,450-square-foot production space. The Herberts recently purchased a historic building in downtown Phoenix, Arizona to open a mead-pairing restaurant. Benefit The Herberts started with two employees and now have over 20 producing 29,000 gallons this year. From a homegrown setup, Jennifer and Jeff are now charting revenue in excess of $2.6 million and distributing to 37 states, across Europe and Southeast Asia. They have plans for another expansion, including a shipping warehouse to manage their online retail and wholesale orders.

ennifer and Jeff Herbert’s home-based brewing has expanded into a global, multimillion dollar enterprise thanks to SBA

5 Tips for Success Get guidance. Develop a working relationship with an SBA Resource Partner (see page 10). Your business adviser will help make your business ready for financing. Define your lending needs. Determine if a loan is right for you and if this is the right time. Define your needs. How much do you need? What are you going to use it for? Include this in your business plan. Keep clear records. Track your cash, inventory, accounts payable & receivable, payroll, sales, purchases, loans payable, owners’ equity, and retained earnings. Most lenders will want to see this data, balance sheets, and profit & loss statements for multiple years. Talk to multiple lenders Talk to multiple lenders and see who best matches your business. Lenders have different levels of risk and types of industries they take on. Check all options. SBA Lenders determine if you’re eligible for SBA financing programs based on your industry & experience, collateral, credit score, and the relationship & transparency you develop with the lending agent.

assistance. Using Arizona honey and ingredients they’ve sourced from around the world (such as Tahitian vanilla and Moroccan saffron), the Herberts are selling nearly 30,000 gallons annually of their honey-based fermented beverage. They operate a downtown Prescott, Arizona tasting room and state-of-the-art production facility, creating jobs and building a local craft industry. The Herberts, founding members of the American Mead Makers Association, have traveled around the world hosting pairing events and pouring at craft beverage festivals. Challenge The Herberts wanted to scale up their meadery while also staying true to their values of quality ingredients and craft process. It is often difficult for new entrepreneurs or unique concepts like a meadery to get traditional financing, even though they knew they had a great idea, the backing wasn’t there to expand. They say that choosing to do something new breaks the mold, which can be uncomfortable for traditional lenders.

Jeff & Jennifer Herbert, owners of Superstition Meadery, completed their 7,450-square- foot production space and opened a tasting room in Prescott, AZ with the assistance of SBA-backed financing. See their story on YouTube by searching for the 2019 National Small Business Persons of the Year.

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