Insights into the world of small business lending and development

SBA loan sets table for African-American restaurateur to get bank loan and expand

This post originally appeared on the blog of CDC Small Business Finance

When Georgia’s restaurant opened in Anaheim’s historic Packing House in 2016, co-owners Gretchen Shoemaker and Marlon Machado conservatively projected first-year sales to be between $250,000 and $500,000. By the fifth month of serving their version of “soul delicious” food to thousands of patrons, they hit $1 million.

“It proved to us we had a winning concept,” said Marlon, Gretchen’s son-in-law, adding that Georgia’s has enjoyed a yearly increase in annual sales of 15% to 17% for four years running and provides jobs to more than 60 people.

So what do restaurateurs do when they find a successful formula? They take it all the way to the bank – literally – and look to open a second location. With a referral from CDC Small Business Finance in their back pockets, Marlon and Gretchen approached Poppy Bank in Irvine.

SOLID GROWTH LEADS TO BANK CONFIDENCE, NEW FUNDING

“A referral from CDC brings a lot of credibility,” said Tommy Thongsarn, Poppy Bank vice president and loan officer, who evaluated the Georgia’s loan request for $500,000 to fund the build-out of a second restaurant at Long Beach Exchange, a hip, new retail center nicknamed LBX. “It was evident early on that Marlon and Gretchen believed in their product, had put up good sales numbers and had the right game plan to continue to grow.”

One of the biggest challenges start-up small businesses face is convincing a bank they are a good investment risk. Turned down initially by banks in 2013, Marlon and Gretchen were advised by the Orange County Small Business Development Center to knock on CDC’s door for an SBA loan.

CDC loan officer Stacey Sanchez was impressed by the entrepreneurs’ passion and commitment and the promise of their planned location – the new Packing House gourmet food hall in Anaheim. CDC approved a $178,000 Small Business Administration (SBA) Community Advantage loan to kick-start the restaurant. After several years of consistent growth, Georgia’s proved it was worthy of additional funding to expand into Long Beach.

SBA LOAN KICK-STARTED SMALL BUSINESS SUCCESS

“Entrepreneurs who are unable to qualify for conventional financing often start with a smaller loan from a mission-driven lender, which helps them launch and establish a solid track record. That success then allows them to qualify for a larger SBA loan from a bank, which helps the business further expand and create new jobs.”

The restaurant concept Marlon and Gretchen banked on is fast-casual soul food with a heaping helping of hospitality. Gretchen personally greets every customer who walks in the door. She often throws in a hug for good measure. After food arrives at each table, she’ll go on a stroll, striking up conversations with her guests.

“I want people to feel important when they come into my restaurants, like they’re stepping into my home,” she said. “I love people and love to laugh.”

GREAT FOOD, WARM HOSPITALITY

And if the warm hospitality isn’t enough, don’t forget what you drove to Georgia’s for in the first place … the “soul-delicious” food! Ah yes, the food … featuring taste bud-delighting recipes created by her grandmother and great grandmother, drifting back more than 100 years. Don’t leave without trying her tangy potato salad, coleslaw, collard greens and cornbread, and the other traditional favorites as well, such as fried chicken, gravy-smothered pork chops and fried catfish. Got room for dessert? Treat yourself to the sweet potato pie.

“We call it ‘soul-delicious,’ but all cultures have their own soul food,” said the 80-year-old matriarch. “It’s just cooking with your heart.”

HIGH PRAISE

Georgia’s winning combination of great food and customer delight has spawned glowing media reviews, including raves from the Los Angeles Times, Orange County Register, Long Beach Post, L.A. Eater, Sauté Magazine and KCRW Radio. The eatery was also featured in a 2018 episode of Food Paradise on the Travel Channel.

Appreciation for her food warms Gretchen’s heart, but she feels equally proud of what the growing success of her restaurant company means for her family, including daughter Nika Shoemaker-Machado, who’s an integral part of the Georgia’s management team.

“My intent all along was to start and grow a business to ensure long-term prosperity for my family,” said Gretchen. “Georgia’s is my financial legacy.”

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