Root Causes:
Access to Capital
Assumptions:
- Capital is available...
- via debt from commercial banks to established food businesses with the "five C's of credit", of which there are really 6: Capacity (to repay), Credit History (score & activity), Capital (skin in the game), Collateral (against which to secure the debt), Conditions (willingness to accept lender's terms), Character (i.e. <> crook)
- if borrower needs more than ~ $100 - $250k, lower limit for which most banks will do a deal
- via equity from venture capital if the business is a start-up with very high growth potential (i.e. "to scale") in a giant market with a significant competitive advantage and proven team, all adding up to the reasonable expectation of > $100M in sales in < 5 years, and thus requiring multiple rounds of financing
- via equity from "private equity" firms if the business are at least $25M in sales
- via various programs from local, state, and federal government - if you can find, figure out, apply, win, & manage them
- via debt from commercial banks to established food businesses with the "five C's of credit", of which there are really 6: Capacity (to repay), Credit History (score & activity), Capital (skin in the game), Collateral (against which to secure the debt), Conditions (willingness to accept lender's terms), Character (i.e. <> crook)