Client Stories

Client Stories

Client Stories

Brewing Success Through a Challenging Startup

A brewery can be tricky to get off the ground without the right financial partner. That's why the founder of Hexagon Brewing went with Pinnacle.

Knoxville was not a brewery town. So when Stephen Apking made the decision to follow his passion and start making his own beer at Hexagon Brewing, he knew the marketplace was wide open and ready for it.

But things change. New businesses always face hurdles – some higher than others – and challenges can appear out of nowhere. That’s why he designed his business plan to be flexible and why he went with Pinnacle and Keely Ritchie, a financial advisor who knew the business and knew how to get around the roadblocks.

“I knew Keely from another business I own and also through the home brewing world,” Stephen said. “She and her husband were big on that scene, so I knew she’d understand what we were trying to do.”

For one thing, Keely knew what many other bankers didn’t: that breweries are much closer to manufacturing than they are to restaurants.

“Restaurants are a much bigger risk, financially,” he said. “Manufacturing equipment is expensive, but it holds tremendous value. Plus, the supplies are cheaper and last longer, and the cash flow is more reliable. Keely knew all that, so she was willing to go to bat for us when other banks wouldn’t.”

Another mark in Keely’s favor was the fact that Pinnacle is a Small Business Administration lender. SBA loans are designed to help American companies grow and are guaranteed by the federal government. The terms are designed for small businesses that often don’t have the capital or collateral needed for a traditional loan with shorter terms.

“I thought about going the investor route, but Hexagon is my vision, and I wanted to keep control of my own destiny without having to bow to money men.”

The process hit a snag, though, when the SBA paperwork and requirements proved more difficult than he had anticipated. The order of operations the government required meant Stephen had to lay out a lot of cash on facilities and equipment before he got approval. He started having doubts. He even started looking elsewhere to see if there was another way to go.

“I talked to someone who knows about SBA and how it works, and he reassured me that I was on the right path,” he said. “He told me I was in good hands even though it can be a frustrating process.”

From vision to opening day was two years – a lifetime in the startup world – but that’s why Stephen built a flexible business plan that could roll with the punches and adapt as needed.

Ultimately, he counts himself lucky. “Keely kept us on track and made sure all our i’s were dotted and t’s were crossed. If it hadn’t been for her, I’m not sure we would have seen it through.”

In that two years, other breweries opened and the marketplace changed. But that didn’t scare him. Instead, he’s using the new normal as a plan for the future. He wants to offer food. He wants to take on brewing contracts and put Hexagon beer on store shelves. He’s even planning to expand and open more taprooms in more places.

Something else important changed in those two years, too. Pinnacle became an SBA Preferred Lender and added an entire team dedicated to making the process easier and shorter.

“There’s really no comparison between the ordeal Stephen went through and the process we have in place today,” Keely said. “Because we’re a preferred lender, we can do almost all SBA approvals in-house without having to get permission from the government. That cuts out an enormous amount of red tape and helps clients get their capital.

“We also merged with a powerhouse SBA lender in the Carolinas and Virginia and now have people who work only on reviewing and processing those loans. So whereas Stephen’s loan process was long and complicated, we can now get clients through it all with funding in hand in as little as 60 days.”

“Starting a small business is hard,” Stephen said. “You want to get to work right away, but as an owner you spend most of your time worrying about funding. SBA loans take a lot of the worry away because they don’t require as much equity and the terms are set up to give you better cash flow. When you work with someone who knows the process and can hold your hand through it, you really can’t go wrong. I’m so grateful for Keely and Pinnacle for helping me see my vision through to the end.”