Could you guess what was coming?
Yes, we get back from our weekend away to find out that despite every indication from the people we've been working with, the bank has turned down our loan. Why? The underwriters don't like the industry (they will not recognize specialty coffee retailing as different than "restaurants") and don't like that we're independent (not a franchise). Obviously there's nothing we can do about either of those. They also would like to see more collateral, but the first two reasons are the big ones. Our banking team says they're just as surprised as we are. Unfortunately, it's little consolation.
It seems that we are now in the situation of having a (pretty firm) location, but no financing. We take a deep breath and set up some meetings with new bankers and make some adjustments to the plan based on what we've learned, hoping that this delay won't cause us to lose the location. We forge ahead and as soon as possible, we submit a new loan application to a different bank (actually represented by the first banker I had spoken with at all during this whole process, whom I had met the previous Fall at one of the SCORE workshops where she gave a really informative presentation on banks and financing).
Meanwhile, the graphic designer we had previously met with recommends a colleague and we begin working with the two of them on the brand identity process, meeting up over coffee after work every couple of weeks for reviews. We also forge ahead with the layout and design of the space, which is an intensive process of exploration and revision using a variety of tools including sketching, paper cutouts, Adobe Illustrator, Google SketchUp (image at left... SketchUp totally rocks!) and even ProE, while working back and forth with the cafe layout consultant.
Early in August we get the great news that the loan has been approved by the new bank (Yay?), but... the package still needs to be separately approved by the SBA, so we start preparing for that process.
We meet with a couple architects and become alerted to some potential code and zoning issues with this particular location and have a flurry of back and forth communications between different representatives and agents until it is determined that there really is no problem after all! Finally, after much back and forth we reach mutual agreement on all the terms for the LOI/lease which is then signed by both parties in late August (phew!). Now we just wait for the lawyers to write up the legalese and the location is set. We're back on track, with lots of work to do!
Next up, counting the months 'til we open...