“Without the SBDC's assistance we never would have been able to make the loan(s) as Steve and Kim did not know how to put the package together. SBDC services made this a win-win for everyone involved.”
When the opportunity first came up in 2006 to buy The Forks Lounge in Willow Creek, in Northern California, Kim Walker and Steve Martinez were very excited. When they started to look for financing, however, they were less confident in their abilities to complete a business plan that lenders would find acceptable. Even though they had both worked in business for a number of years, the commercial loan process was something entirely new.
So they went to their local banker and asked what they needed to get a commercial loan to buy the business and property. And the banker sent them to the North Coast Small Business Development Center for assistance.
Their SBDC Business Advisor met with the potential owners and took them through the steps the bank would be going through and how they would assess the business plan and the financial projections.
Kim Walker worked on the overall business plan. “The SBDC really made us jump through the hoops, having us revise the business plan several times before it was complete enough for the bank to evaluate," she said. "We had no idea where to start on a business plan, and the SBDC process helped us to focus our efforts in completing the plan needed for loan application package.”
Steve Martinez worked on the financial projections. He wasn’t quite sure about the many revisions he was asked to make but after the third draft was completed, he could see where the process was heading.
Steve and Kim submitted their loan application and business plan to Redwood Capital Bank and were approved for a loan to purchase the business.
Their SBDC counselor also suggested that they work with a local economic lender to get a working capital loan so the business would have enough money to carry it through the start up phase. The strategy of a bank loan for the purchase and an economic development loan for the working capital was just the combination needed to get this business acquisition moving forward.
Redwood Region Economic Development Commission (RREDC) loan officer Virginia Fisher did a site visit and was very impressed with the success of the business and the changes the new owners are making.