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  1. #1
    Junior Member
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    Sep 2012
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    Financing a Roaster - Advice

    Hi All,

    Wanted to get some thoughts on financing a roaster. My partner and I have limited upfront cash on hand and noticed manufacturer like Diedrich have options listed for financing. Wanted to see if members had good/bad experiences, lessons to learn from, and general advice for someone search for a roaster.

    Let me know,
    rawal22

  2. #2
    Senior Member
    Join Date
    Jan 2007
    Location
    Salt Lake City
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    1,044
    Is financing a better rate through your bank/credit union? If you can't get financing through another source, should you be starting a business?

    Will you be able to make payments without selling any beans?

    Are either of you experienced roasters, salesman, or coffee people? Wondering if you understand the business enough to plan accordingly and understand how to project sales, and even more -- how to roast coffee properly and make repeat sales.

    I always think, do what's necessary, but if your funds and/or your credit is limited, don't give yourself a way out, know that success is your only option.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    caffedbolla.com

  3. #3
    Junior Member
    Join Date
    Sep 2012
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    13
    Hi John P.

    Those are all great questions, and yes we are new by most roasting standards. We have been home roasting for the last 6 months or so and talking about it for about a year. Both have sales experience, a passion for coffee, and one of us works for a local roaster and I work in advertising (Tired of selling my soul).

    Yes to start we do not have cash on hand for a roaster and were doing research on other options to obtaining a larger drum roaster. With my current job would be able to make payments on the roaster while we figure out our profiles, and such, and once we started working with some folks who we have spoken with then we could start using our product to support growth/cashflow. When it comes to credit unions and such, I was not sure if they would finance if they did not see the roaster as an asset that retains its value.

    I am most curious to see if anyone has had good/bad experiences financing and if it is recommended or not. I trust most folks here have more experience than I do. Any advice is welcome and helpful.

    Thank you,

  4. #4
    Senior Member
    Join Date
    Mar 2012
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    1,215
    Have you considered a home equity loan?

    Its currently a great time to refinance if you own your home and have some equity built up. (Rates have been running under 3%)

  5. #5
    Senior Member
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    Jan 2007
    Location
    Salt Lake City
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    Good call! I agree with eldub.

    We financed all our original buildout with home equity. It was 2% cheaper than an SBA loan at the time. And it looks like they are extremely low now.

    If you're not willing to put your home on the line, you really have no interest in being an entrepreneur.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    caffedbolla.com

  6. #6
    Junior Member
    Join Date
    Sep 2012
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    13
    Thanks for the advice. All makes total sense. I agree that is a great way to access capital. Sadly, I do not own a home to borrow from.

    Will continue to investigate creative ways of raising money.

  7. #7
    Senior Member
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    Jan 2007
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    Salt Lake City
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    1,044
    Two words: Medical Experiments!
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    caffedbolla.com

  8. #8
    Senior Member
    Join Date
    Jul 2006
    Location
    MA
    Posts
    659
    There are leasing companies that will lease any type of equipment with a 10% buy out at the end. Usually a small deposit and a security payment is required. You said you can handle monthly payments so until you find a roaster or a way to lease you should be putting money into the bank monthly as if it were a payment towards a roaster. Build up some cash to show the banks you have something. No roaster manufacturer will lease directly, they have a company that does that. Good Luck!
    Charlie
    If you are afraid of failure or losing money, quit while you are ahead

  9. #9
    Junior Member
    Join Date
    Sep 2012
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    13
    Great advice, will start to do so. Right now we are in the midst of preparing our business plan, figuring out logistics and operations, so this is all good advice. Also, perhaps I will start going to those medical studies at the local university

    Also, for our first roaster originally we were looking at a 12k roaster, but have since felt scaling back to a 5k roaster would be better to start. This is understanding if we were to need to roast more we would have to bust our butts. Would you agree this is a good size, we wouldnt be looking to put more than 100lbs a week for atleast the first year.

 

 

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