Issue link: http://winesandvines.uberflip.com/i/480754
66 P R A C T I C A L W I N E R Y & V I N E YA R D April 2015 W I N E B U S I N E S S sales, and it helped him obtain a small business loan. Scotto's brother, Anthony Scotto III, runs Scotto Cellars, which produces more than 40 brands that sell across the United States and internationally. His sister owns a successful Northern California wine distributorship, J. Woods Beverage. Their rela- tionships have helped to put Sera Fina wines in front of hun- dreds of buyers, securing distribution in 21 states and in Europe. In 2013, Anthony Scotto III was able to get Sera Fina wines in front of a buyer from a large chain in Denmark. They sold the chain 2,200 cases that year and hoped to increase that number by 1,000 in 2014. "Without my family, I would be happy to be in three states," says Scotto. "Because of them, we are in 21 and growing." Rapid growth poses unique challenge Sera Fina's growth, though good, created some unique chal- lenges for the winery. The increase in sales volume meant the winery was getting more orders than it could fill with its lim- ited inventory. They needed financing to expand production. In addition, as their wines became more popular, Scotto wanted to fully build out his winery and tasting room, and plant more vineyards so he could expand the amount of premium, estate-grown wines produced at Sera Fina Cellars. At a turning point, Scotto approached Tech CU. Most small business owners do not think of a credit union as a resource for business lending, but with more now offering SBA loans, they are an excellent alternative to traditional banks. In addition, lenders that, like Tech CU, belong to the SBA Preferred Lenders Program can offer help in speeding up the approval process and navigating paperwork. When it comes to the qualifications lenders want to see for SBA applicants, Anzalone says, "We are looking for a strong business model that can show sound financial performance on a historical or projected basis, regardless of how big they are (we are happy to work with small, emerging wineries). We also look very closely at the strength of management and the winemaker, which are big indicators of a business' potential for sustainability and growth." Anzalone offers other considerations for awarding a loan to a winery or vineyard that may include: assets owned by the busi- ness, consumer brand recognition of the winery and reputation of the winemaker, repayment ability and cash flow. In the midst of California's drought, Tech CU like many lenders requires all agribusinesses to show proof of an adequate water supply. This can be done through testing conducted by a well contractor or other third party. Why work with a local lender? • Understanding your business. The SBA team at Tech CU reviewed Scotto's business model closely and was able to see the winery is part of a family network of successful wine businesses that will help Sera Fina Cellars succeed. • SBA expertise. With comprehensive knowledge of the many SBA programs, Tech CU lending specialists ascertained that Sera Fina Cellars qualified for the International Trade Loan Program due to the winery's exports to Europe. This helped to speed the processing of their loan application. • More flexibility; faster decision-making. As a California financial institution, Tech CU was able to offer fast service and greater flexibility because of local decision-making, which made it possible for Sera Fina Cellars to access needed capital quickly.