Line of Credit Building a New Bakery
Author: Stephanie Clarke
Date posted: 10.12.22

After receiving glowing feedback for the gluten-free baked goods they sold at the nearby farmer's markets, two close friends decided to look for an alternative location to bake beside their home kitchens. They successfully found an established bakery that was interested in selling. After signing the lease papers for the new location, they established their reputation in the industry.

Allergy-Friendly Equipment

 

Because they were committed to providing gluten-free options for their patrons, they were aware that upgrading their facilities would be required. They were mindful of the potential risks cross-contamination posed to those with severe allergies. As a result, they decided to sell the old ovens and tables to fund the purchase of new machinery.

They were aware they would not have enough money to purchase an entirely new kitchen for the bakery, so they decided to take out a loan to assist them in acquiring the necessary items.

How Much Money Was Needed?

 

Ovens that were brand new cost approximately $6,000 each, and butcher block tables cost $3,000 each. When looking at their various financial options, they decided that $50,000 would be a good starting point because they wanted to leave themselves some wiggle room for possible future costs.

They desired a solution that allowed them some leeway in how and when they spent the money and some breathing room before they were required to pay back the entire amount.

 

The Best Option for Their Needs

 

They could have obtained everything they desired with a short-term loan; however, they were not in a hurry to make all their purchases simultaneously. They would begin with two brand new ovens and a butcher block table that was brand new. As time passed and their company expanded, they would eventually invest in different ovens and several additional tables.

They could make purchases on an as-needed basis and make payments as they could, thanks to the availability of a line of credit. They were able to take out funds from the line of credit as their company expanded, and they would pay back the money as soon as they were able to.

In The End?

 

Following the signing of the lease, these close friends were able to get their bakery up and running in a span of just six weeks. They took all the necessary precautions, making their establishment a safe haven for people who have celiac disease and those who are intolerant to wheat and gluten.

Their bakery is popular in the neighborhood, and they have expanded their selection of baked goods to include freshly baked loaves of bread, specialty coffees, and chocolates. They have been able to pay down a significant portion of the initial sum that they borrowed and are already looking to buy a few more pieces of equipment to expand their offerings.

About The Author | Stephanie Clarke

Stephanie has a bachelor's degree in psychology and has been a professional writer for over 15 years. Her client list includes New York Times bestselling authors, publishing houses, prominent public figures and successful business owners. She resides with her family in Florida.

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