What financial resources do I need to start a paint and sip business?
The start-up cost to open a Pinot’s Palette ranges from $97,000 – $250,000 depending on the format of the business and the area. However, that doesn’t mean you need that much cash up-front. There are a number of ways to structure your investment for Pinot’s Palette ownership. Below are the most popular ways our franchise owners have done it.
How much cash do I need?
Typically finance partners want to see 25 – 30% cash injection of the total value of the loan. The minimum capital requirement for Pinot’s Palette’s consideration is $80,000. There are other qualifications that must be met when working with a finance partner. You will want to start the conversation with finance partners early to learn what financing is available specifically for you.
Small Business Administration (SBA) Loan
SBA loans are government-backed loans accompanied with low-market rates. The advantage of using a SBA loan is that it can allow you to conserve cash. There are no prepayment penalties and the interest rates tend to be lower. Pinot’s Palette is in the SBA registry. This allows our loan applications to be reviewed and processed faster by the SBA.
Community + Local Bank Loans
Community banks offer loan programs for small businesses. More than half of small business loans under $200,000 come from community banks. Community banks have a range of services for financing your business. Some of these services include the following: financing for equipment, a working capital line of credit, refinancing for existing debt and competitive loan rates with flexible structures.
If you have an IRA or a 401K, it can be converted into an IRA to fund your Pinot’s Palette. The advantage of doing this is once you set up your self-directed IRA, you are able to tap into those retirement funds penalty free. There is no long loan approval process as this money is yours. When your business is succeeding you can make those payments back into your retirement without having to pay interest to the bank. This option also helps you free up the cash you have in your bank account.