Beer fuels small loans; Sam Adams founder's program boosts area entrepreneurs

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The Boston Herald
By: Greg Turner
August 16, 2010

Call her the ``coaster child'' of Jim Koch's ``Brewing the American Dream'' project.

Two years ago, Carlene O'Garro was the first entrepreneur to tap into the Boston Beer Co. founder's microlending program, which helps small businesses get started or stay afloat in the competitive food and beverage industry. The Mattapan resident had created her dream business - baking cakes, cookies and pastries - but was lacking a key ingredient needed to keep Delectable Desires cooking.

``When I got the money it was mainly to pay the vendors I had at the time, because I was so small and I was making very high-end products,'' said O'Garro, a Cambridge School of Culinary Arts grad. The $2,500 ``Dream'' loan ``kept me going.''

O'Garro has since been immortalized on actual Sam Adams beer coasters, along with two other early loan recipients, David Warner of City Feed and Supply in Jamaica Plain and Lucy Valena of Voltage Coffee in Cambridge.

Koch started the $250,000 loan fund to help the kind of budding entrepreneur he was back in 1984, when he was brewing Sam in his kitchen and selling it bar to bar out of his car. He teamed with Accion USA, an established, nonprofit microlender based in Charlestown, to dole out the dough.

``I know how to make beer. They know how to make loans,'' said Koch, who did help review loan applicants - O'Garro included - early on and participates in related coaching events. ``One of the things I learned is it's not easy to find the businesses that are going to repay the loans.''

More than 40 entrepreneurs have been served by ``American Dream'' loans, and the repayment rates are above 90 percent, according to Accion. Loan amounts range from $500 to $25,000, with interest rates averaging 11 percent. Boston Beer Co. has since added $100,000 to the loan pool and donated an additional $130,000 for speed-coaching workshops, financial literacy seminars and community outreach.

``It's not just a traditional funding partnership where they just write a check,'' said Erika Eurkus, senior director at Accion. ``With Sam Adams it's funding, but it's also an entire company including the founder behind the philanthropic work.''

The timing of Koch's charity couldn't have been better, with the Great Recession applying an icy grip to the credit market and investors jittery as Wall Street headed to a big fall in 2008.

``It was serendipitous,'' Koch told the Herald last week. ``It was the right thing at the right time, but we were going to do it anyway, even if prosperity continued. Because even in good times, small businesses have a hard time getting access to loans and good advice.''

Warner and his wife, Kristine Cortese, were approaching the opening of a second location of City Feed and Supply on Jamaica Plain's prime Centre Street two years ago when the project hit construction delays. Bank loans and city financing were coming up short - until the Jamaica Plain Neighborhood Development Corp. pointed Warner to Koch's program. They secured $20,000.

``The program really fulfilled a need. The banks can't or won't do everything, and not every business has a lot of options for resources,'' Warner said.

Many of the loan recipients buy equipment that's vital to run their business, but beyond their means. All Anita and Bob Gokey needed was a sign - a $17,000 upgrade to the discolored, hazardous beacon standing next to Route 1.

The owners of Karl's Sausage Kitchen & European Market in Saugus tried to work the purchase into their operating budget, then went to secure traditional financing. Despite their good credit, they couldn't get a loan. But one bank officer who rejected them also referred them to Koch's program.

``We're really excited to have the sign to really represent the quality of the product that we produce here,'' said Anita Gokey, who celebrated last week's sign installation by toasting with Sam Adams beer.

Dessert maker O'Garro, who paid back her Accion loan in 14 months, found another way to ``repay'' her benefactor. She refined a sugar cookie recipe by adding Sam Adams seasonal beer to the mix.

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This page contains a single entry by CFED published on August 17, 2010 2:41 PM.

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