By Patrick Law
The road to starting a business is full of potential obstacles. One significant impediment is finding the money needed to secure a lease, purchase equipment, and pay for employees. A lot of people seek out loans from traditional banks.
However, not everyone qualifies for commercial loans, and right now, interest rates are so high, it might not make sense to borrow from a bank. Fortunately, the Methow Valley has an ace up its sleeve when it comes to helping entrepreneurs raise money: the Methow Investment Network (MIN).
The Methow Investment Network uses peer-to-peer lending to connect local investors with business owners and entrepreneurs wanting to start or grow a business. Investors are part-time and full-time residents who understand that keeping their funds local facilitates economic self-sufficiency and job growth in the Methow Valley.
So how does it work? If someone is interested in pitching to the investment network, they fill out an Opportunity Submission Form on the TwispWorks website. We schedule an appointment with them to go over their plans and explain the process for pitching to the investment network. We help them develop a business plan, slideshow presentation, and financial projections.
Once ready, we schedule the presentation at one of our quarterly pitch events. Presentations are typically 5-15 minutes, with time afterwards for questions. If investors are interested in the opportunity, they contact the business owner and the two parties discuss potential terms.
Cross-section of businesses
Since its inception in 2018, the Methow Investment Network has facilitated over $3 million in loans to over 20 businesses throughout the Methow Valley. The businesses represent a cross-section of the local economy, with everything from the trades and recreation to professional services, restaurants, and manufacturers having gone through the process.
Some of the businesses include the North Cascades Mountain Hostel, Cascade Pipe, 509 Automotive, Old Schoolhouse Brewery, Printmade, The Little Dipper, and Blue Star Coffee Roasters.
While it’s thrilling to see all the businesses that have benefitted from this program, there are two instances from the last six months that really exemplify the impact MIN can have on the local economy.
The first is Lucid Glassworks, a blown-glass studio in Twisp operated by Samantha Carlin. Her distinctive dot tumblers can be found at the farmers market and in local retail outlets, including The Mazama Store, Glover Street Market, Aspen Grove, and Methow Valley Goods.
Recently, demand for her functional and aesthetically pleasing glassware has outpaced her ability to produce new work. The main bottleneck has been her old furnace, the product of a company that has since gone out of business. This has made it impossible to find replacement parts or a qualified service technician. A new furnace would help Carlin keep pace with demand, but with a $20,000 price tag, she wasn’t sure how to afford it. That’s when she approached MIN.
For Carlin, this was a familiar process. She had already applied for, received, and paid back two previous loans from MIN investors. With the holidays approaching, Samantha wanted her pitch to go out as soon as possible. After a few tweaks, we distributed the presentation via email.
The response was immediate. Samantha was able to place an order for a new furnace within weeks. Once installed, her production will ramp up, allowing an independent artist to sustain and grow her business.
Nonprofits have benefited
Most businesses that come before the MIN are for-profit, however, several nonprofits have also approached the investment network. Methow Trails is one such example. Another example is the Housing Authority of Okanogan County (HAOC), which is developing affordable housing near Winthrop. They needed a bridge loan to cover the cost of infrastructure while they were waiting to receive grant money.
In the end, the HAOC was able to secure a significant portion of the $1.3 million they needed for infrastructure. Through discussions with TwispWorks and members of MIN, the HAOC also decided to include several units of work force housing in the project, in addition to the affordable units available for low-income individuals.
Sometimes the best outcome of a MIN pitch does not result in a loan. Entrepreneurs often approach the investment network because they need advice or guidance. Many of the investors have backgrounds in business, finance, and real estate. For rising entrepreneurs, this type of knowledge and experience can be invaluable.
Access to funding can make or break a business. With the Methow Investment Network, I see local investors helping local entrepreneurs. The small businesses that benefit go on to meet the essential needs of valley residents. I’m proud of the small role the Methow Investment Network has played in this aspect of our local economy.
Patrick Law is the Economic Program Director for TwispWorks.