Posted: July 15, 2009
Owners of Belgian beer cafe find a friend in Colorado nonprofit
With many lenders saying no, Colorado Enterprise Fund saves the dayJay Dedrick
It was a good idea from good business people, but it came in a bad economy. James and Tina Pachorek were well on their way to opening the second location of their Cheeky Monk Belgian Beer Café. Then the money that had been promised was no longer there.
“We were already knee-deep –- actually chest-deep –- in this project last fall,” says James Pachorek. “Then we’re getting information back from some of our original lenders saying, ‘Sorry, our bank is going under. You’re a goner.’”
Enter the Colorado Enterprise Fund, a nonprofit community development fund that offers business loans to entrepreneurs in need. Since 1976, the fund has provided $14 million in loans, as well as counseling aimed at ensuring loan repayment.
“In this economy, the traditional banks are passing up a lot of good deals,” says Alan Ramirez, the fund’s commercial loan officer who worked with the Pachoreks. “We felt this was something falling through the cracks, a loan that might have been approved a year ago.”
The Pachoreks first had to demonstrate a healthy track record in business to the fund. That wasn’t a problem: Denver’s Cheeky Monk on East Colfax is a key piece of Capitol Hill’s ongoing revitalization, having established a cozy destination for beer lovers seeking out unusual brands rarely found around here. Dozens of beers, most from Belgium, fill the lengthy drink menu, including such rarities as Chimay Triple and Blanche de Bruxelles — both on tap, no less. The restaurant-bar was an immediate hit after opening in 2007.
It wasn’t the Pachoreks’ first success, either: Before the Cheeky Monk came along, the couple in 2002 launched Aurora ’s Royal Hilltop, a suburban oasis serving pub fare, a wide variety of European beers on tap and two-dozen single-malt scotches.
Ramirez also had to study the Pachoreks’ books to assess risk. “Capacity, someone’s ability to take on new debt, is a major piece of our decision-making,” Ramirez says. “It’s pretty involved. Because we’re such a small organization, it’s really important that we get a good feel for the business.”
That includes a site visit and a study of the proposed location, in this case Winter Park Village, and time spent with the owners. “There is a strong character piece to our loans, which separates us from some traditional lenders,” Ramirez says.
“My wife and I are very integral on a daily basis in the operation of all our places,” says Pachorek, a self-professed beer geek. “(CEF) took into account that we weren’t just opening a place and letting it do its thing. We’re always here. They listened to us, fortunately, because not everybody did.”
The Pachoreks got the money needed to complete the project; James won’t specify the amount, but calls it “a pretty good chunk of change.”
The Cheeky Monk was an unconventional choice even for the CEF, Ramirez says. Restaurateurs are especially hard-hit by the tightening of banks’ purse strings, but a restaurant that emphasizes its beer selection first and foremost wasn’t a typical partner for the fund.
“Because we’re a nonprofit, we don’t work a lot with liquor-based businesses,” Ramirez says. “But we try not to be too restrictive. If we think the business owners and their enterprise are doing something good for the community, we try to invest. We’re not going to put a restriction on the restaurant industry, or any specific industry, just because of the risks.”
The result is that the Cheeky Monk’s Winter Park location opened in February, creating 22 new jobs in the resort town. The wait could have been much longer without the help of the Colorado Enterprise Fund.
“We’re taking calculated risks on how we’re going about our lending, but it’s absolutely clear to us that businesses like this are trying to create employment and revenue for their communities,” Ramirez says. “We hope that these partnerships have a huge role in getting the economy rebooted.”