Issue link: http://read.dmtmag.com/i/501762
9 4 V I N E YA R D & W I N E RY M A N A G E M E N T | M a y - J u n e 2 015 w w w. v w m m e d i a . c o m w w w. v w m m e d i a . c o m likely as Millennials (10%) to have received funding from a home equity loan or another form of personal debt. On the flip side, 67% of Millennial small-business owners are concerned that credit availability will impact their business over the next 12 months, while fewer than half (48%) of Gen-Xers and 36% of Boomers had this concern. Friends and family are an important funding source for Millennials, as 30% report they've received a loan from such sources in the past, often r e p r e s e n t i n g t h e f i r s t round of funding. ENTER CROWDFUNDING Elaine Jurun is plant- ing some 3,500 vines on her 10 acres in Enumclaw, Wash. After graduating from the University of Washington with a viti- culture degree, she pur- chased land largely with her own savings. In Janu- ary 2015, realizing she needed working capital for her Goldfinch Vineyards and without even consid- ering applying to a tradi- tional lender, Jurun turned to the crowdfunding site Kickstarter (www.kickstarter.com). While she hopes her location will attract tourists from Seattle, with no previ- ous wine-industry experience, not much collateral and having depleted her own savings, it would have been tough for her to obtain a traditional lender's support. "It's a generational thing," Jurun said. "I want to build my business as organically as possible. People hen previous generations needed capital to launch or expand their winery or vineyard, they typically set up a meeting with the bank with which they did business, completed a lengthy form, agreed to pay fees and then prepared to wait several weeks as committee members considered their application. If you were a good customer with good credit, chances are you got the loan. If not, you'd be told to use your own savings or try elsewhere, like with a rich relative. For some borrowers, the Small Business Admin- istration (SBA) absorbed the risk of the loan, but the process still went through a bank. While traditional forms of borrowing are still the norm, increasing compe- tition is coming from so- called alternative lenders, which are quickly gaining acceptance among the next generation of wine- making entrepreneurs. C o n s i d e r t h a t 1 4 % of Millennial-age small- business owners (those born from the early 1980s to the early 2000s) have turned to nontraditional lending services, accord- ing to a Bank of America report released in 2014. Just 1% of Baby Boomers and 3% of Gen-Xers have received funding from nontraditional sources. The report also notes that Millennial owners of small businesses are nearly five times as likely as Gen-Xers to have received past funding from a peer-to-peer net- work, while Boomers (25%) were more than twice as BY JOSEPH FINORA Alternative Lending Moves into the Mainstream Startup wineries and Millennials turn to nontraditional funding sources For wineries unable to secure bank loans, there are an increasing number of alterative options. Photo: Thinkstock For wineries unable to secure bank loans, there are an f