Sam Adams’ Founder on Bringing Its Microloaning Program to Chicago

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It helps to have friends in high places, and if you're a struggling entrepreneur who can't secure a loan, Samuel Adams would like to be your friend. Through a partnership with Accion Chicago, the beer-maker is bringing its microloaning program here to give financial help to small businesses who can't get traditional loans through the usual channels. The program has been around since 2008, and the first local recipient is Pecan & Charlie’s Mobile Cupcakery, a cupcake truck run by chefs who quit their day jobs.

I gave Jim Koch, founder and brewer at Samuel Adams, a call to talk about the program, what Sam Adams gets out of it, and whether programs like these can fix the economy.

For those who aren't familiar, can you give some background information on the program?

Jim Koch: It started in June 2008 in New England. It grew out of my experience 27 years ago starting Samuel Adams in my kitchen. Even though I have a lot of passion about brewing, I couldn't get any loans to start the business. The other thing that I couldn't get that would've been helpful is just basic coaching and mentoring about the nuts and bolts of the small business. I've got an MBA from Harvard. I'm supposed to know about business. You get tripped up all these basic things like how do you pay your people and make all the right deductions for FICA and unemployment and federal withholding, blah blah blah. You can't just write them a check. Or how do you design your packaging? What should you look for when you're negotiating your lease? Just these basic nuts and bolts, because a small business is generally expert at one or two things. I knew a lot about brewing and I knew a lot about beer. Everything else I needed help on. Out of that experience came the American Brewing Program that fills both of those missing elements.

There's a microlending component, and there's a coaching and counseling component. Both of which we do in partnership with Accion Chicago. They have been indispensable in getting us off the ground and making it work successfully. It really is a partnership with them. We can provide business expertise and we can obviously provide money to fund the program, but it takes expertise, hand-holding, it's a very high-touch kind of lending. They also know how to screen applicants.

What we've been able to bring on is not only funding but also visibility for it because we actually have more money to lend than we have qualified applicants. Which seemed surprising at first, but when you think about the small businesses, businesses that can't qualify for a bank loan or even an SBA loan, businesses like that generally the entrepreneur is working so hard that they don't have the time go and find available resources. What we're doing now, between you and I, is publicizing the program. That's how we've gotten a lot of our loan recipients, through getting the word out that is money available. We love to find people who can take a small loan of $2,000, and use that loan to successfully grow their business, create jobs, hire people, and then pay the money back so that we can then take that money and continue to recycle it until it eventually runs out.

Why bring this to Chicago?

Jim Koch: A couple of things. We're comfortable taking it on the road because we started it in New England and it's been very successful there. We then rolled it out earlier this year to other places where we have a presence. That would be Ohio presumably. We have Pennsylvania where we have a brewery. New York City, which is not that far from Boston. We're down there a lot. Chicago was the next place because Accion Chicago is very strong. Our distributors here in Chicago have been very supportive of the program both financially and being willing to provide expertise in our coaching sessions.

That's another piece of the program that so far we've been able to engage and hopefully help about 1,500 small businesses. One of the other elements to the program that we developed is like speed-dating, but it's speed-coaching. We do it in the evenings, when businesses generally have some free time, and a small-business owner or an entrepreneur comes and they will sign up for 20-minute sessions with people from Boston Beer Company, and now additional organizations who have expertise in specific areas that are necessary for small businesses. Generally we'll have about 20 different coaches. They'll come in and say, "Okay, I'm starting a cookie business with exotic grains. I need some help with packaging." So we'll have a package designer and procurement, and we'll have our person who goes around the world to find our ingredients. Whether it's cinnamon from Saigon or lemon zest from the Middle East. We have our Indiana Jones of ingredients there. And they may need expertise licensing, because it's a food business. So we'll have somebody with expertise in licensing. They'll have 20 minutes with each one of them. What you discover is it's amazing how much value you can add to a small-business owner just in 20 minutes when it's focused on a specific problem that the business owner has and an area of expertise that the coach has.

What's the benefit to Sam Adams?

Jim Koch: I think it is a benefit to us because it keeps us very close to our entrepreneurial and small-company roots. As the company has grown, I've felt a real need to make sure that we continue to realize that we're basically not that much different from these other small companies. The fact is in our industry we're a very small company and we need to continue to think entrepreneurially, to think like a small company, and make sure we maintain that part of our culture. To me that's a really important part of it. It is also, for our people, a really gratifying experience. It's fun to have an area of expertise and come to one of these coaching sessions and actually be an authority to small businesses. It's really gratifying to do what you do every day and use it to help a little business that is very grateful, and you can see the results.

Do you see this as a short-term solution to a long-term problem? Do you foresee programs like these

Jim Koch: Well, I can't speak for the economy. [Laughs.] What I can say after over three years of doing this is there's a very clear and strong need for programs like this because there's this funding gap. Banks don't want to lend money much under $100,00. Certainly not under $50,000. If you're a business and you're a sausage company that has a 50-year-old sign out on the busy road that's in front of your store, and the sausage has turned green and you need $1,800 to get a new sign and you know it's going to push your business up 20 percent, there's no where to go. Banks won't do it. The engine that's gonna pull us out is, I think, is small businesses. We're just a tiny part. I think we've made about 100 loans at this point. It's resulted in about 600 jobs.

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