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Boston Beer Co founder replaces banks as craft brewery lender
The founder of the Boston Beer Company, Jim Koch, is offering loans to craft beer businesses which banks find too risky.
Koch, a sixth-generation brewer who became a craft beer pioneer when he launched his business in the early 1980s, told Fox Business that he sees it as his responsibility to support the craft beer sector.
Highlighting how he is looking out for the smaller businesses, Koch said: “We’re loaning to mom and pop, three-person businesses that banks don’t even want to look at.”
The loans are part of the Accion Opportunity Fund which distributes loans to help businesses such as craft breweries gain funding, support and coaching to aid growth.
Describing the level of success versus the level of actual risk, Koch revealed that the businesses he chooses to lend to all have a 98% repayment rate and only one in 50 loans default.
Koch revealed: “We want them to pay the money back because then we can loan it to somebody else.”
Koch admitted he knew how challenging it was to secure financing and recalled how when he had started out it had been a struggle to find support from banks.
He explained: “It wasn’t hard to get capital, it was impossible. No bank would lend me money…everybody thought it was a joke. I had a friend who was in a venture firm, and he’s like, ‘Jim, we’re used to taking risk, but this is just ridiculous.’”
Koch said that he observed how even the “idea that you could start a brewery was inconceivable.”
Koch however is unphased by competition and noted how he does not view how his moves to support other breweries as anything other than supportive of both the industry as a whole and the betterment of the sector, Koch pointed out: “We’re all small relative to our real competition with these big global brewing conglomerates” and added: “It’s just more fun to be in an industry where you actually like and enjoy and admire and respect your competition.”
According to reports, Boston Beer Co currently has a market capitalisation of US$3.42 billion. The business owns household names such as Samuel Adams, Twisted Tea, Angry Orchard, Truly Hard Seltzer and Dogfish Head Brewery. In a recent letter to Koch, Ben Kovler, the chief executive of Green Thumb Industries, asked the brewer to consider a merger to create a “powerhouse of brands.”
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