Myself and two partners are opening a business in Essex County.  Besides the SBA, which we are actively researching, does anyone know how to fund a new business?  Grants, loans?  I'd like to stay away from private investors for the moment but it could work as a last resort.  

 

I don't think we're the typical "walk into the bank and get a loan" scenario being that the business is brand new.  My hope is to secure a loan to pay for startup costs and equipment, plus maybe a year of operating costs.  500k would be great, 750k better.  

 

Thanks!
 

 

Can't help you but what's the business?

 

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How much are you putting in it? That's one thing they all look at. Do you have a business plan?

You need a detailed business plan before anyone will consider financing. What is the business? Who are your prospective customer? How will you make money? Why are you qualified to make the business work? etc....

As a business owner, I would be very cautious about opening a business in NJ when we will have Sweeney as a Gov. in another year.

The business is a smallish local brewery.  Plan is for a taproom, distribution of kegs to area bars and semi-regular cannings for sale "to go".  Business plan is 98% there and should be done by the end of next week.  

Can you clarify about Sweeney?  Is he anti-business?

I think before any further advise is given you must provide beer samples to all members thay participate in this post

 

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My tech nerd buddy always talks about QuickStart.

Sure!  Internet beers for everyone!   :drinks:

Don't worry I'll make sure everyone is well informed of the opening.  If all goes well I'd love to have the doors open by the fall.  Lots of permits, buildout, equipment install, etc. before then.  Not sure where I'll find the time.  

 

Just jumped on quickstart it looks like an IT training company?  Not sure that would apply here.    

NJSBDC works hand and hand with the SBA and isnt a bad place to start for resources.

750K is going to be a lot of money to be asking for without you guys having the proper equity already in place.  Even with the SBA, most lenders are going to want your home, your gun safe, your left testicle and your first born as collateral.  Hope you guys are thinking about a large initial investment of your own money.  Sweat equity is not going to cut it in today's lending market.  Once you have your business plan together, I would also try smaller banks in addition to the SBA.     Not just the big boys but your small neighborhood bank.  Most of the neighborhood banks or NJ based banks will be more willing to lend once a personal relationship is built.  Don't want to sound like Debbie Downer here but good luck to you.

Thanks so much for the input.  I don't see it as a "downer", just reality - and I'd much rather know what the reality is.  Good idea about the local banks.  

 

750 is a big number, that would be ideal but we can get by with less.  The initial investment of just the equipment is close to 200k before we even turn the lights on.  Crazy.  

I think before any further advise is given you must provide beer samples to all members thay participate in this post

 

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+1000!

Have you ever owned a restaurant or bar? Forget traditional bank financing unless you have (a) great financials, and (b) are good with personally guaranteeing both the construction and equipment loans.

 

Investor prospectus and sell shares of ownership is probably your best bet.

Sure! Internet beers for everyone! :drinks:

Don't worry I'll make sure everyone is well informed of the opening. If all goes well I'd love to have the doors open by the fall. Lots of permits, buildout, equipment install, etc. before then. Not sure where I'll find the time.

 

Just jumped on quickstart it looks like an IT training company? Not sure that would apply here.

Well, nobody knows what genre, scent, industry, black market, market you are asking bout.

Oh, just back read.

Micro brew

Crowd funding.

Investors.

Sell tokens worth a beer now at a reduced price, this will give up front money now but you will take a little hit when the tokens are cashed.

Sell clothing items with the brewery name; shirts, hats, etc... These are easy get.

A small business loan will require 10-20% up front.

There are multiple small business development centers in NJ, associated with the SBA. The SBDC's use taxpayer money so there is no out of pocket expense to sit down and work with a professional. Joe in AC is very helpful. I don't know what you have up there but some Google-fu should help.

I think before any further advise is given you must provide beer samples to all members thay participate in this post

 

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agreed!  

One thing no one has mentioned here yet is that 90% of small businesses fail within the first year.

 

While that sounds overly pessimistic, it just means you need to have your shit together before jumping in. Make sure your business plan is solid and well thought out. Take a step back, do a thorough SWOT analysis.

 

As far as financing is concerned, you'll most likely have to give equity to raise capital. I can't see much debt being issued for a company w/ no cash flow and a non-disruptive idea.  Like others have mentioned any loan you will secure, will be secured by YOUR PERSONAL ASSETS. If the business fails, you're on the hook.

 

A lot of hurdles to overcome, but good luck. Starting a small business is never easy, but very rewarding if you get up and running. 

Go for it. Ill grow your hops. That the next new thing in nj. Hops growers. I have about 4 open acres now i can do hops in.

I started mine out of pocket. Can't help with investor or loan advice, sorry. Never needed any additional capital. I've just saved and re invested. I also didn't need that kind of capital to start up. Tools, trucks, and equipment, I rent an office and shop. I can say this state is extremely business unfriendly. Hire a good attorney to set you up with a C corp, for you, and your partner. Hire a reputable accountant, and never give anyone you hire control of your money. It's inconvenient, but the only safe bet.

Good luck, hope it comes to fruition for you. Beer is awesome!

 

Once again thanks for all the info.  It reinforces for me that bank financing will probably be impossible although we are going to try.  This whole thing has been a huge challenge and gives me a lot of respect for those who strike out on their own in the business world.  

 

Golf - I will need a lot of hops!  Definitely let me know if you decide to grow, and what varieties.  

Credit cards and a home equity loan.

Bank's will not lend you money until you no longer need it.

Go for it. Ill grow your hops. That the next new thing in nj. Hops growers. I have about 4 open acres now i can do hops in.

Interesting.

Once again thanks for all the info. It reinforces for me that bank financing will probably be impossible although we are going to try. This whole thing has been a huge challenge and gives me a lot of respect for those who strike out on their own in the business world.

 

Golf - I will need a lot of hops! Definitely let me know if you decide to grow, and what varieties.

get your legal stuff together before going for banks/ private investors.

I hired a lawyer.

Deerslayer is correct. It takes 6 months in jersey by mail, when it takes 15 minutes online for pa. And, we call them backwoods?

get your legal stuff together before going for banks/ private investors.

I hired a lawyer.

Deerslayer is correct. It takes 6 months in jersey by mail, when it takes 15 minutes online for pa. And, we call them backwoods?

Not sure what takes 6 months. You can open a new Co in less than 10 min online.

 

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SBA's going to want a house or 2 as collateral.

Good luck with the business.

Not sure what takes 6 months. You can open a new Co in less than 10 min online.

 

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Hic liscense

Have you considered selling discount memberships. Pay $100 now for a 75% discount on beer bought for the first year.

 

Sell names engraved in your barstools bar or tables to investors.

 

Do you have any talk about your beer now? Do you have bar or brewing experience? Do people associate you or your company with premium beer? If you can't demonstrate this in a hard or meaningful way, it's difficult to get financing.

 

Best way to start a business is out of your garage and grow slowly. I've seen three NJ brewers now start that way and at least one is doing great after two years in their commercial space.

 

Good luck. The world needs more quality beer.

I don't know much about starting a business but I can tell you that you should look into incorporating or at least an LLC. My BIL has a mechanic shop in VA and almost lost his house and three vehicles because his business was tied to his personal finances prior to becoming an LLC.

 

 

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I don't know much about starting a business but I can tell you that you should look into incorporating or at least an LLC. My BIL has a mechanic shop in VA and almost lost his house and three vehicles because his business was tied to his personal finances prior to becoming an LLC.

 

 

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This is much more complex than just opening a llc. If you get sued, a good lawyer will easily pierce the corporate veil.

 

Talk to a decent lawyer when opening your co to understand how to separate your assets from the business.

 

But like I said before if you're bootstrapping, it makes it that much more difficult.

 

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As stated above, LLC or Inc give you some legal protection. An LLC gives you a little less protection because you own it but it only gets taxed once. To incorporate you actually become an employee oc the inc, the inc gets taxed and you, as an employee, get taxed again. It is tougher for you to be sued successfully as an individual if your incorporated. This is an over simplification of a very complex issue, a real lawer can better explain. Once you decide LLC vs. Inc, you can regester with the state. It's done online and is fairly easy. Once your regestered you should start doing things in the business name. If you are going to seek a small business loan you will need to establish credit for the business, this is known as a "Dunn and Bradstreet Number". (Www.dnb.com). Even if you are not seeking a loan now, it doesn't hurt to have this step done for future needs.