Working With Credit Unions Like Summit Credit Union To Grow Your Food Business
In Edible-Alpha® Podcast Episode #6, Tera talks with Dana Hoffmann and Jason Herlitzke of Summit Credit Union about how food and value-added agriculture businesses can work with credit unions like Summit to grow their business. Like all credit unions, Summit is a cooperative which exists to serve their members. Summit is based in south-central and southeast Wisconsin and is the #1 Small Business Administration (SBA) lender in Wisconsin among credit unions for the past 6 years.
Summit helps food entrepreneurs access SBA 7a programs to provide up to $5 million of capital to younger businesses for working capital, inventory, and equipment purchases. The SBA 7a Express program provides a quicker turnaround than the traditional 7a, allowing for loans up to $350,000. Businesses must be able to show that they will be profitable within 6-9 months to qualify for SBA 7a programs. In addition, Dana and Jason discussed other SBA programs they can help clients utilize like 504 real estate and equipment loans.
Dana and Jason talk about the importance of food entrepreneurs, during the application process, showing lenders like Summit that the business has a strong business plan, including a target market, a competitive analysis, and financial projections with documentation/assumptions to back up the projections. They want to see that entrepreneurs have skin in the game through putting equity in the business, usually at a starting point of 10-20%. They also emphasized that entrepreneurs will encounter problems and make mistakes, and that the best way to be successful is to be upfront and transparent about any issues that have come up or might come up during the loan application process and after receiving a loan. Dana and Jason see food entrepreneurs as creative problem solvers that, like Summit, are working for the benefit of the community.