SOURCE: Wells FargoDESCRIPTION:
At the age of 34, Brian Menges had achieved his life dream of owning a restaurant, 2nd Street Bistro, in Livingston, Montana. Business was good over the years for Menges, who now owns the restaurant group Slainte Mhath Inc., which also includes The Murray Bar, Gil’s Goods, and a commercial kitchen.
The restaurant group was making about $15,000 to $20,000 a day in revenue and had 60 employees at the beginning of 2020, but when the COVID-19 pandemic began, all but five employees were laid off for the first few months. About 20 were hired back, with the business operating at about 25% of its previous revenue, but by late 2020, revenue dropped to about 10%.
“I think this is kind of speaking for restauranteurs across the country when I say it’s been absolute, complete, and total devastation of the industry,” Menges said. “That was quite shocking after 17 years in the business and being a solid operator and good at what I do, to recognize that we were facing imminent bankruptcy at no fault of our own.”
'These businesses need a ramp back to success.'
Fortunately, Menges learned from a friend about MoFi, a nonprofit community development financial institution that provides loans to individuals, businesses, and communities across Wyoming, Montana, Idaho, Washington, and Oregon. Menges received a loan of $100,000 through MoFi’s new Thrive loan program, which had a soft launch in November 2020. The Thrive program will officially launch this month, providing working capital loans with friendly repayment terms and attractive rates to help businesses.
“We know that businesses like Brian’s, that were successful pre-COVID but have hit a wall of some kind, need working capital to get them to the end of this,” said Dave Glaser, president of MoFi. “We’re going to provide these loans within three days of application because we know these businesses need the money, and they need it now. We are also providing loans with a below-market interest rate for two years of interest-only payments because, when we get through this, it’s not just going to magically go back to the way it was pre-COVID. These businesses need a ramp back to success and back to bankability. We wouldn’t be able to do what we’re going to do with Thrive without Wells Fargo’s support.”
Thanks to a $2.1 million grant from Wells Fargo’s Open for Business Fund, MoFi expects to reach up to 250 businesses across the region through the Thrive loan program, with an estimated average loan size of $40,000. Wells Fargo created the Open for Business Fund in 2020, reinvesting about $400 million in gross processing fees the bank would have received from the federal government for lending through the Paycheck Protection Program — a government stimulus program providing small businesses with short-term cash flow assistance — to further help entrepreneurs recover.
Wells Fargo has provided support to MoFi for more than a decade, including New Markets Tax Credits, loan capital, and employee volunteers. “Over the years, our support has grown and deepened,” said Jane Pavek, Community Development manager for Wells Fargo’s Pacific Mountain Desert Region. “The Open for Business Fund grant that we gave to MoFi is one of the largest in the country. They’ve demonstrated over and over again that they are going to use our money effectively and efficiently and get it to the people we need it to get to. We’re only as strong as the communities we serve.”
'This has allowed me to get a good night's rest.'
Before receiving the loan from MoFi, Menges had received some financial support, but when his business account fell below $10,000 in late 2020, he had to lay off all of the employees who had been hired back in the spring.
“To my absolute astonishment, every single one of my employees I had laid off volunteered their time for the next two months and came in for free to help the business survive,” Menges said. “It was the most incredible thing I’ve ever seen in the restaurant industry.”
The employees were officially brought back on when the restaurant group was more financially stable, around the time Menges received financing from MoFi. “This funding that we were able to procure has allowed me to get a good night’s rest, which is something I haven’t had in months,” Menges said.
Glaser said that Menges is a perfect example of the type of businesses Thrive wants to help. “For a community like Livingston, his businesses aren’t just a business,” Glaser said. “They’re a community-gathering place. If his businesses were to go away, it would change the town forever in a negative way. He has all the makings of being able to emerge from this successfully if he can just get working capital to do so.”
For Menges, his restaurant group has made adjustments in the way they operate in response to the pandemic and have been able to avoid any COVID-19 cases among staff — and business is picking up as people are getting more comfortable with dining out.
“I know that when we come out on the other side of this, we’re going to be so strong, mentally and financially, getting out of the cycle of debt, having positive numbers in the bank, and not staying awake at night wondering how you’re going to pay rent,” Menges said. “In our darkest hour, this financing came through, and it’s impossible to put into words how important that was for my operation and the sense of well-being and knowing there was help out there.”
Watch the video: After revenues plummeted during the COVID-19 pandemic, Brian Menges, owner of the Slainte Mhath Inc. restaurant group, laid off employees and thought his small businesses dreams were dashed. With support from Wells Fargo, MoFi provided low-interest capital to Menges so his company can recover and survive. (2:37)
KEYWORDS: Wells Fargo, Open For Business Fund, small business, COVID-19, NYSE:WFC