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Brewery Acquisition Financing Options · Craft Brewery Financial Training Podcast

• 0:00
  Speaker 1: Today on the podcast I speak with Scott Ner from Dogwood State Bank. Scott and I talk about how to finance a startup brewery, buy an existing brewery, or make a partial acquisition of an existing brewery. This is a new item that the SBA offers under its loan program. So, lot of very cool details to check out. Scott also provides his overview of the banking and financing situation as it exists now in the market as far as credit availability, interest rates, and what the future may hold. So for now, please enjoy this conversation with Scott Bergner from Dogwood State Bank. Welcome to the Craft Brewery Financial Training Podcast, where we combine beer and numbers to provide you with tips, tactics, and strategies so that you can improve financial results in your brewery. I'm your host, Kerry Shumway, A-C-P-A-C-F-O for a brewery and a former CFO for a beer distributor. I've spent the last 20 years using finance to improve financial results in our beer business. Now I'm helping other craft breweries to do the same. Are you ready to take your brewery financial results to the next level? Okay, let's get started.
• 1:12
  Speaker 2: Scott Bergner, my man. Welcome back to the podcast.
• 1:16
  Speaker 3: Hey, Carrie , how you doing?
• 1:17
  Speaker 2: I am doing well. How about yourself?
• 1:19
  Speaker 3: Very good, very good. Summer's winding down, so
• 1:23
  Speaker 2: No, don't say that. Not yet. We still got a good chunk. We're recording this year on August 8th, so we still got hopefully , uh, a good three or four weeks left before you know we're officially done, right?
• 1:32
  Speaker 3: Yes. Yeah, that's true. That's true.
• 1:34
  Speaker 2: I hope so. Well, you've been on the podcast a few times, but for folks that may not be familiar with you or what you do , uh, why don't you give a little bit of background?
• 1:43
  Speaker 3: Sure, yeah, appreciate that. So, I , I work for Dogwood State Bank. Uh, we're a community bank headquartered out of North Carolina. I've been with the bank just over four years. I work in our SBA loan division, and I've been in the SBA business for over 25 years. Uh, I've been doing craft beverage lending for probably over 15 years now. So Dogwood State Bank, we're preferred lender for the SBA. Uh, we do seven A loans, 5 0 4 loans, USDA loans, and we do those on a nationwide platform. So, although I'm in North Carolina, I could do loans in 50 states. Uh , those loan sizes are usually half a million dollars up to about $15 million. And our group has identified certain industries that have good potential, and craft beverage is one of those industries. So I work with startups , expansions, acquisitions of breweries and distilleries nationwide.
• 2:37
  Speaker 2: Fantastic. So for more details on the SBA loans, you and I have talked about this in the past, so we won't rehash it today, but I will share that in our post and show notes that people wanna get more of a primer on loans. And , uh, you did did a really nice job of kind of recapping those in a past episode. So today we're gonna talk about and dig in on the details of buying an existing brewery and kind of how to, how to finance that and what all the rules are. But before we do that, maybe just give folks kind of your state of the union as far as, you know, banking and finance. Like what does it look like out there? And you can kind of take that any direction that you'd like.
• 3:15
  Speaker 3: Yeah, sure. Um, so the Kraft Beverage industry , uh, has, you know, in the last probably year, year and a half has, you know, I'd say faced some challenges, right? So , um, you know, after COVID-19 , you know, we get tired of talking about it, but it was a thing, you know, I think the, the on-premise markets, you know, bars, restaurants, breweries, you know, they had to shut down. They experienced a lot of operational difficulties. You know, these closures led to substantial declines in their revenue on the, on-premise channels, right? Which contributes generally to more than half of their sales, any brewery, any craft brewery. So, you know, the off-premise surged at that time, but a lot of brewers struggled to adjust to that rapidly. I think shifting, you know, to the demands of the market, right? Whether that be canning and, you know , to go and, and some just didn't have the ability to do that, didn't have outside accounts to kind of keep them going. So I think that has created a lot of challenges for breweries that were starting up around that time and didn't have a lot of traction in their markets. And then when they reopened after covid, they're just not seeing a lot of folks went back to the places they knew , uh, they had gone to before, right? And that they continued with that brand. So , um, that's first. Second, I think, you know, no , everybody seems to see and know this, that the markets are saturated, right? There's still some pockets in areas and there's still deals that come across my desk where it's a good location or there may not be a craft brewery in town yet. Um , but there's a lot of the bigger markets that are very saturated. There's a lot of beer and a lot of other products that are out there and available. Um, so, you know, we're really keeping a close eye on that. And I think that's impacted the industry , uh, credit availability in the industry and certainly decreased. You know, a lot of banks and, and and peer banks that I know that were in this industry have kinda , um, come off on the sidelines for a while just to let things, just even out, see where this is all gonna go. You know, you have a lot of rising costs of the materials and the goods that impact the margins. We got very high interest rates , um, on, on loans or SBA loans. Um, you've got competition, right? We're seeing a booming popularity and ready to drink cocktails and , uh, and that's prompting breweries to reevaluate the product offering. Some will do it, some won't, you know , they're gonna stick to their guns and, and , um, let the consumer decide. And then there's a lot of emphasis now on the health conscious side, right? Whether it be the flavored malt beverages or non-alcoholic beer , uh, a lot less calories, less sugar than the conventional beer. So there's, there's that piece that's , uh, starting to cut into some of the market share as well. So from my seat, that's what it looks like.
• 6:10
  Speaker 2: Thanks for that rundown . Uh , we were talking before we started recording about sort of the volume of transactions that you're seeing in the beer space. And you were saying that's kind of really quieted down and it could be any number of factors, but are you seeing any transactions or things coming across or even anecdotally , um, in the beer space relative to existing brewery acquisitions? Or is it still kind of startup based , or what , what are you seeing in that regard?
• 6:38
  Speaker 3: Uh, we see both , um, startups have slowed down. I think. Um , a lot of people are excited. They have their plan , they're having difficulties now with the cost of things. Everything has gone up. Interest rates are up. Uh, the timing right? Finding an adequate space, the space is are expensive. Um, landlords have increased those, just like everybody else has had to increase things. So I think they're starting to look at that return and figure out, boy, the margins are definitely impacted on this. Maybe it's not the right time. So it just depends on the borrower. If they're so far into the project, they'll probably push forward and we'll find a way to get it done. Others have just said, maybe it's not a good idea. I'll just push my plan out another year or so and just watch and see what happens with the markets or the election, so on and so forth. Um, acquisitions. So still seeing 'em , still working on 'em . Um, a lot of these acquisitions that are coming to my desk are not financeable. So it's somebody that's wanting to sell their brewery and exit, whether they're just retirement age or tired of running the brewery, but the financials of that particular business aren't supporting a purchase price or a proposed purchase price for somebody new that wants to enter. It's a great way to enter, right? We love acquisition loans because we're looking at financials and we're historicals and we know it's a proven , uh, entity, hopefully. But there's a lot of 'em coming across modest desk that aren't proven 'cause the numbers aren't, aren't supporting it, right? And the sellers of the brewery still have a huge investment they made, and that's what they want to walk out with and just, I can't finance it. So those are, those are tough. Um, we've done some, you know, in the past we were doing some re-branding , uh, breweries like that, where if the seller finally just said, Hey, I'll just sell the assets, you know, I'll just sell the equipment, let's get a valuation on the equipment, whatever it's worth, that's gonna be part of the SBA loan that I would provide. Then we could provide the new buyer working capital, other things to, to start the business. But it's a significant haircut from probably the investment that the individual or the group of individuals put into the initial brewery. So it's kind of tough to swallow , tough pill to swallow. Um, so seeing a bunch of those. But I think, you know, I , hopefully with more podcasts, the the sellers of these breweries don't understand, you know, if you're looking to sell it for a million dollars, it's kind a cashflow, a million dollars loan for somebody new to buy it , right? It can't cashflow $200,000 'cause we got a huge deficiency there, it's not gonna work.
• 9:23
  Speaker 2: Yep . Yeah, that's a good point. Can't say it enough. I mean, I do think that still exists where the seller always wants an unreasonable amount, the buyer would rather pay less, and it doesn't really matter if the thing doesn't cash flow . So that's really the first and fundamental question is, you know, is this thing gonna pay for itself? Is it gonna cover the debt that's required in order to, to make the acquisition? And a lot of times that that very simple back of the napkin doesn't get done right away.
• 9:49
  Speaker 3: Correct .
• 9:50
  Speaker 2: That, that can create problems. Do you, this is sort of interesting because I think my sense is we know that there's a lot more breweries that are closing their doors these days. Um, you know, you have Brewers Association, Bart Watson has all the statistics on that. Um, so it would seem that there are potentially more opportunities for someone that would want to come in and acquire an existing brewery, not withstanding if they can negotiate the right price. Um, are you aware of any markets, any resources, any places where, I mean, outside of a traditional broker where an owner, I'm, I'm sort of envisioning a brewery owner sort of listening to this now and going, well, I haven't listed it 'cause I don't wanna spook anybody, but I do need to start figuring out some sort of exit plan. Do you , are you aware of any resources or places for, or, or how might somebody kind of go about if they're in that situation?
• 10:44
  Speaker 3: Yeah, a lot of my , um, deals are come to me just from word of mouth to be honest with you, because I've been in the industry like you for quite a while. So people know me, they see me on LinkedIn. I've financed a lot of breweries in my career, so I just be , you know, I know a lot of equipment vendors, so just people that they talk to. I haven't necessarily, I have a lot of business brokers around the country that I do loans with or, or refer loans to me, non brewery, right? But some of them do get breweries and so they, so, so they're business brokers , um, that are out there that, you know, will look at these deals and, and get the , get the business listed, put it up on the market. Uh, there's websites like biz buy sell , right? Somebody go on biz buy , sell and list their own business if they wish, or they could find a broker there. So I think those are good resources, but on my side it's usually the consultants I'm working with folks like you , uh, word of mouth, you know, brewery consultants that are, you know, maybe even on the operational side more that's that get wind of these deals, you know, hey , uh, these guys are struggling, you know, might be time for them to exit, you know , how do we, and , and then somebody new's ready to step in but needs some funding, right? So that's how those deals get to me. So I have not had many, if I'm being honest, come from my traditional business broker side. Mm-Hmm, , um, you made a point though about closed locations, right? So let's say a brewery is already closed and the space is there. I mean, so the new person coming in, that's a home run. I mean, the place is upfitted, it's got the drains, it's got the power, it's got the water, it's got all the fundamentals, like the big expenses, right? Of getting these and the time. So you would think home run for a while it was, but as the industry has seen a lot of other closures, the credit space has gone, wait a minute, why would we wanna reopen another brewery in a place where a brewery just failed? Just like when you drive down the street and the local restaurant was there for six months and they closed , and then a new sign goes up and everybody tries it for a while and we'll see if they're gonna make it. Well, that's the same thing here is was it the location? Was it the demographics? Was it the competition? What, we don't know the story. We don't know why the other brewery closed, right? Normally we don't, we don't have that information. It's not public. And sometimes it is, it's on, you know, Google or , uh, whatever you can, you can look at things up. But the issue there is are , are we doing a , are we gonna be looking at a failure in six months, right? Should we make this loan ? Is that a prudent decision for the new borrower to do this? In their mind? It is because it's a real easy entry to get open quickly versus the process of construction and, and you know, a startup brewery. So you just touched on something that, you know, I get a , I I , I've seen a lot of those , um, and I've seen a lot of people. I actually have done, I do distilleries as well, and actually I've done, I just closed two that were former breweries that distilleries entered for that reason. So we went, well, it's a different industry, little bit and made the exception. We'll see, we hope it goes well.
• 14:04
  Speaker 2: I hope so too. Yeah, that is true. I mean, you can, you can shortcut the process in , in , in potentially save a lot of money if you buy that existing location, but to your point, you might be buying a bad spot. Um, so that, I think the, the takeaway on that is for folks to really do your homework and due diligence. I have talked to people in the past that are in the process of doing just that. They're buying an existing location maybe, or maybe not keeping the same brands. You look at the financials, you're like, wow, they we're not doing well at all. And there seems to be this feeling like of, oh, well we're gonna do it better, right? We're gonna , we're gonna come in and do this and we're gonna do that. And, you know, things will be different. Like, oh, well I hope so, but, you know, let's, let's put pencil to paper and be very specific about what you intend to do and the outcomes you intend to achieve, and how exactly that's gonna be different than what was before,
• 14:55
  Speaker 3: Right?
• 14:56
  Speaker 2: 'cause as they say, hope isn't a strategy. So we gotta do, gotta run the numbers. . So let's talk about, you know, when you're starting up a bureau and to kind of contrast this sort of from a business perspective, starting up a brewery versus, you know, buying an existing, acquiring an existing location, how do you kind of, you know, break that down maybe, maybe what are the, the key points about buying an existing space versus , um, doing it from a startup perspective? What are the pros and cons maybe of, of buying an existing brewery?
• 15:59
  Speaker 3: Well, yeah, I mean the, the, the good news about a brewery that's for sale is, you know, we can get a full financial package. We can , we have tax returns to review. Um, we can quickly qualify that business or not qualify it, right? Is this truly an acquisition of goodwill or is this gonna be just an acquisition of selling the brewhouse, right? This just the hard assets of the company. So you , I can quickly determine a path forward for the borrower, right? To make sure. And then they, sometimes they have to go back to the seller to say, well, look, this is what the bank said. And then we have, you know, but that's the beauty of an acquisition, is you're buying somebody else's business and you're hoping it's healthy, it's got cash flow , it could support you or what you need to make from it to support your personal household. So we could dig into that super fast versus a startup where, you know, it's a projection based loan, it's a business plan, it's what your background is, but there's a slew of other things to get to the closing and then get open. And some of those , it could take six months, it could take a year and a half, it could take longer because you're dealing with government, you're dealing with permits, you're dealing with architects and engineers and contractors, and I mean, you don't have that with an acquisition. It's usually it's me, it's the borrower, it's the seller, and it's a business broker, right? So you just have those folks to manage that piece and, and get the inform I need to get the information I need, right? And get the questions answered. Sometimes we do a video call, get, you know, talk to the seller, right? Get some good information. So, and those can close a lot quicker. So you save time as money, right? You can get open , you can. So that, that's the, the, the positive piece. You know, our, my primary focus is then the historical performance, right? We start there. Um, does it support this proposed purchase price? Is there strength in the personal guarantor? What's their background? Right? So we're looking at that and then we get a little bit into the demographics and the competition. Whereas on a startup , we're looking at a whole array of things, right? Um, so again, just minimizes the timing of these, of these deals. Um, as we talked about, you know, briefly, the seven a loan, you could do these an acquisition loan, 10% down startup is typically 20% might move to 30% 'cause of credit risk, right? Might want a little bit more skin in the game. So , uh, you can, even if the seller is in favor of this, the seller can hold a note for 5% of that 10. So the seller can, you know, hold a 5% note and borrower can come in with as little as 5% down and , and 90% financing. So, you know, another positive. Um, and we could provide additional capital for any wholesale changes to the business model or improvements if needed. Some more CapEx for equipment. So, you know, the , those are the, they come in, they cash flow , those are the easy deals. The other ones are those, we talked about rebranding a failed entity. Um, that's a pretty big hurdle now. It wasn't at first, probably a year, year and a half ago, but now that's gotten, you know, we've done, we've, I've personally done enough where credit is saying, is this what we're gonna be continuing to look at? 'cause if it is, we think there might be just some other ri you know, key risks in the industry, right? Um, so have to be careful there.
• 19:26
  Speaker 2: Yeah , makes sense. So if you think about , um, either deals you've done or, you know, I guess I'll call 'em case studies, any examples to share of these types of transactions? And you can be obviously very generic with, you know, the numbers and whatnot. But , um, what does that look like? I mean, you, you described it very nicely, I think, in terms of what the S-B-A-S-B-A will finance and what type of loan that is. But , um, any other particulars , um, that the SBA is looking at or that you look at with this type of Well,
• 19:56
  Speaker 3: So unfortunately, I , I am, I do work for a bank, so due to confidential information, and I also usually want an acquisition. I normally have to sign an NDA to get the financial information, either from the seller or the broker or both. So I really can't share a lot of that specific information. Now, startups are easier to share because it wasn't an ongoing business , right? Uh, so the borrower's usually super excited after the closing and I can ask 'em to do testimonials and, and things of that nature. So if anybody goes on my LinkedIn page or Dogwood's website, you'll see a number of deals that we've closed, right? You'll see testimonial from the customer , um, or you'll see just kind of a breakdown of the transaction. So I have personally closed, I believe about six loans where I did a rebrand. Um, and they were quite easy to be honest, right? But what happened after, and I'm being honest to the, to the listeners here, is after about six of those, my credit manager called me and said, are we gonna continue? Is this what's going on in this industry? Do I have a concern? Why are we doing all these rebrands and rebrand? Why aren't we seeing expansions? Why aren't we seeing healthy acquisition loans? Um, I know we do startups , right? He said, but what's going on there? So we had a discussion. And so from that point on, I kind of slowed that down a little bit and, you know, I, I have to listen to the bank, I do work here , um, and it makes sense, right? To maybe it's time to just simmer it down a little bit. Um, but I do have, if, if anybody goes out there and looks, you'll see quite a few , uh, testimonials and people that are nice enough to, you know, provide some feedback on how they felt the loan went, how it was handled and, and where they are. Um, haven't seen a lot of expansions lately. Actually seeing the other side, from what I'm hearing in the markets, there's a lot of consolidation going on. Um, I have a brewery that I financed. I just, I can give this example, I won't say where it is or who they are, but brewery that I financed several years ago has done very well. Um, so it's a good story. And , um, unfortunately another brewery that I financed, probably 30 to five , 40 minutes away from them , uh, the owner had some health issues and some personal issues kind of getting in the way of the business and thought, and he was, he already paid off his SBA loan. He was there seven, eight years. Um, and so the opportunity came up for the, you know, he was closing and, and walking away, right? And so the opportunity, these other guys swept in there, they didn't need equipment. The place was upfitted, the furniture was still there, and all they did was execute a lease, no capital, no SBA loan. They're, they're taking , they're transporting the beer from their main location. It's only four minutes away bringing the beer. And they already have a brand and they got a great name, and they're , and this place was always full, right? So there's a great scenario where for little money, they just had their eyes out and ears out there on the street to say, Hey, if there's something in that, you know , so there's an opportunity there where you're seeing these places just kind we're , you can jump on if you have some capital do it yourself. In this case, it was a lease deposit sign, the lease reopen, they were open in three or four days. So good story. And they actually did it on a third location. So they went from one to three within three years, and they're doing very, very well. So, you know, without my help, I got 'em started, but they, they've done it on their own, which is a good story, right? To see that , um, you know, they're keeping these locations alive and , and , and they were thriving locations. There was just unfortunate circumstances for the owners that caused them to have to exit the business. Gotcha . What else? Well, we like to hear those good stories. Yeah, that , well , it is , you know , and , but I will say , you know , it's been , um, acquisitions , expansions, it's been somewhat quiet. And I think it's a lot of the things that are going on in the market, a lot of things going on , uh, with interest rates and with elections and the just uncertainty , um, that are just pulling people back, right? Summer's almost over. Usually that's when things pick up. Kids go back to school and people start to get back to business. So I expect to get busy here pretty soon, and it has picked up in the last few weeks. Um, you know, I think one other thing we wanted to talk about, something that's a little bit new with SBA was , um, you know, and we've done quite a few of these now, is where, let's say you have a, a , a seller of a brewery that's just kind of tired. It's cash flowing. Business is growing well, but they've been at it many years and just, it's a , it's a, as you know, it's a tiring business. It can be , uh, but they don't wanna fully exit the business . So we can now do partial buy-ins of a business, which is great. It's exciting. I've been doing this over 25 years and never could do this. Uh, so SBA removed that requirement that all, it used to be that all change of ownership had to be a hundred percent. You had to sell the company either a stock purchase or an asset purchase . Well , under this program, now, we can do a, a , a buyer can come in and buy a portion of the business , uh, it must be a stock purchase sale. And generally what we're seeing, the structure is that the seller remains at a 15% owner and the new buyers come in and take over 85%. Uh, and , and the nice thing about that is the seller then can reduce their salary reduce, you know, if they had an automobile running through the company, there's discretionary earnings that can get add back to add back to cash flow . So we also can look at doing it with no equity required because the seller's remaining, he's not exiting or she , so the business balance sheet for the most recent completed fiscal year and the current quarter must reflect the debt to worth. And here I go with credit stuff, but I'm gonna just stay with me, reflect a debt to worth ratio greater than nine to one prior to the change in ownership. If it meets that requirement, we can finance that 85% stock purchase buyout of the seller, a hundred percent plus capital if needed. You know, which you probably didn't because it's a stock purchase. So the cash should remain in the bank account and , and , and everything else should remain the same. So it's a great way for a seller to not retire, but pull back, right? I'm just tired. I don't wanna run the day to day , I'm, I , I , I just, maybe I just wanna make beer, maybe I just wanna serve the front of the house, right? But whatever the, the owner's capacity is now, but not do it seven days a week, as we know, it's a lot of work, it's a lot of cleaning, it's a lot of things to do. And managing all the people and the payroll and, and , and the , and the customers. So , um, that is something new came out at October of 2023. We've been doing a lot of deals that way where seller thought they wanted to go a hundred percent out. But as you start to talk to them, they're like, well, you know, I'm only 55. What am I gonna do next? I love the business, I just don't wanna own it any , but I'm happy to help these guys transition. So those are great credits for us because, you know, a lot of times when we're doing a hundred percent asset purchase of a business, we don't know if the new guys are gonna succeed, right? We don't know how much handholding is there is somebody there to help them. This is a great way to do this. So , um, they can reduce their ownership, they can add back some of their salary or any discretionary expenses. They still can earn a living. They still could stay on the benefits. Um, uh, if there was any equity needed, the seller can hold a note for standby. So there's still it's great creative way to structure some of these deals. For somebody that doesn't want a hundred percent walk away from the business,
• 28:18
  Speaker 2: Are there minimum percentages? So if you've got an owner that owns a hundred percent, do they have to sell at least a certain amount or could it be
• 28:26
  Speaker 3: Good question. No. Uh, I , if, if, if they retain 20% or greater of the company, the issue that's happens there is SBAs requiring them to guarantee the SBA loan for the buyer. And there's not many people I , I think personally so far that I've encountered that say, well, geez , I'm 20%, but I'm gonna be a hundred percent on the hook for the new loan for the new guy or gal. So I think I've reduced my ownership under 20. We've been doing 85, 15. It just seems to be an easy round number. We get a valuation of the business and we just cut it, you know, here's your 15%, here's your 85, 85 is now the price that we put in the SBA loan to pay out the existing seller , uh, of that percentage. And so , um, you can go, I mean , you can get creative, probably make it 19%, it would be fine, but you know, it just has , it seemed to be cleaner. And this is something new folks for us and SPA. So I'd imagine after this first fiscal year, which will end in October for SBA , uh, there'll be some changes, right? There's gonna be some more rules. They like rules. Um, and we don't. And so we'll , there'll be more pages to the policy as to what we can and can't do. But so far the lenders and the peer lenders we talked to, this is how they've been doing 'em , this is how we've been doing them . Uh , we'll find out after some audits if we're doing them right. And there'll probably be some changes to the structure. But , um, it's a great way, like I said, for people, any business, it doesn't have to be the brewery industry. It could be any business where they don't want a hundred percent exit or some a business that requires a, a specific license, like contractors, you know, if the new con person coming in is not a licensed contractor and it takes 'em two years to get a license, how do they run the business? Well, the seller stays in for 15%, keeps the license on the wall and you can operate the business. So , um, I just wanted to touch on that 'cause that's something, it's pretty exciting. We haven't had something new in a long time with SBA, so it's given us the ability to look at some deals and more larger deals. You know, deals that are five, $6 million where we couldn't really touch those before in the SBA side. So even on these larger breweries , um, this could work out.
• 30:45
  Speaker 2: Yeah. Well , I'm glad we talked about this because I know majority of the folks that I come into contact with want to start a brewery up from scratch. And that, as you've alluded to, is it's getting harder to finance those, you know, the credit markets just aren't what they were. The trends in the beer business overall are not, not great. So I think this gives people other options to think about. Number one, yeah , you could do startup , figure out your financing, you know, come up with your equity two, buy an existing brewery and under the terms that you're outlining, it's, it sounds like that could be really interesting. And then this partial acquisition. So there's different paths to get into the business, not just, oh, I want to go start up my own. Um, so that's what I was excited to talk about with you and kind of share that with people. It's like, Hey, you're not, it's not a brick wall. You know, if that startup financing don't work, then you know, here's two other paths you might want to consider. Take a away . Sure,
• 31:40
  Speaker 3: Absolutely.
• 31:41
  Speaker 2: So let's look at , um, this will be crystal ball time. Why don't you take out your crystal ball and try to do the impossible. So we're gonna suspend reality here, but where do you see banking and financing credit markets, interest rates headed over the next few years? What are we looking at?
• 31:58
  Speaker 3: Oh boy. Uh , well I, as we've been discussing on this podcast, this one, I think we're gonna continue to see more on the acquisition side, consolidation , um, less startups just from a sheer expense and, and timing. Um, I think the industry's gonna still be at a high risk for a while , um, from a credit perspective. And I think, you know, rates easing will help. Um, but I don't have that crystal ball, although I heard something today. It says we're looking at something maybe in September and that would be good. Um, but that's from my side , uh, what I'm seeing, you know, I just think we still have an appetite for this industry. Um, I've been in it personally a long time. I really enjoy it. It's been a lot of fun. Uh , it's some of the best borrowers you can lend to. I mean, what's more fun than going , making beer and making people happy, right? And so I finance a lot of different industries in this, you know , in SBAI don't just do craft beverage. And these are by far the most fun, the most fun borrowers, the best conferences , um, great referral sources, right? It's like, it's a really, it's, it's kind of like what you hear with , um, breweries helping other breweries on our side. It's even on the banking side. Yeah, we all compete, but at the end of the day, we help each other. You know, if I can't get a deal done, 'cause I'm stuck for certain reason, I'm gonna call somebody else. I know that's an SBA lender at another bank and say, Hey, you know, I think this is a good deal. Here's where I'm stuck. Maybe you wouldn't be stuck. So that doesn't go on in a lot of other industries. Um, so it's , it's, it's unique in that way. So I do think there's, there's still space for it. Um, we still have space for it, so, or we wouldn't be doing this podcast, but you know, we just caution right now. Uh, deals just have to look better. They have to be stronger. Uh, the individuals coming in should have that experience or make sure they're getting that experience or hiring consultants to help them , uh, really put it together other than just the dream. I'm, you know, making beer in the garage and here I go, right? I think you really gotta just decide that path and the acquisition path is terrific, right? Your ease of getting into this, the costs are gonna be lower. Um, sometimes if the financial's there, you got a proven, proven entity, right? Nothing better to step into. So that's my crystal ball.
• 34:41
  Speaker 2: I like it. I like that crystal ball. So Scott, great stuff as always. Really appreciate it . If folks wanna get in touch with you, learn a little bit more, maybe talk about, you know, options relative to partial acquisition or buying an existing brewery, what's the best way for them to connect with you?
• 34:56
  Speaker 3: Yeah, a couple ways. Obviously you can email me my cell phone . I'm on LinkedIn, just Scott Ner on LinkedIn. Um, you can go to our website. It's Dogwood State Bank Small Business Lending. You'll see , uh, I'm listed there. You can click on it and get right to my email. You can see a lot of the testimonials there. Uh , my cell phone number is (704) 564-5940. You can call me or text me. Uh, just identify yourself please. I know who you are and what we're gonna talk about. Um, but that's it . I'm, I'm definitely Rachel , you can Google me. I'm out there.
• 35:32
  Speaker 2: That's good stuff, Scott. Thanks so much for the time. Thank
• 35:35
  Speaker 3: You, Carrie . Appreciate it.
• 35:37
  Speaker 1: Thank you for listening to the Craft Brewery Financial Training podcast, where we combine beer and numbers so that you can improve financial results in your brewery. For more resources, tools, guides and online courses, visit k craft brewery financial training.com. And don't forget to sign up for the world famous Kraft Brewery Financial Training newsletter. Until next time, get out there and improve financial results in your brewery today.