Six Ways to Fund Your Food + Beverage Startup

Article by Caroline Halter, PieShell

Anyone who’s run a food or beverage business knows that the most difficult part isn’t perfecting your recipe or finding the right place to set up shop — it’s securing funding!

Whether it’s a little money to bootstrap the beginning stages of your company or larger sums for growth, food and beverage entrepreneurs often find it difficult to access traditional funding sources like bank loans. Together with our community partner, New York Business Development Corporation (NYBDC), we’ve put together a handy infographic below to illustrate exactly where startup food and beverage businesses can turn to the capital they need.

1. SBA Loans

Loans are a common method of financing, but many newer businesses have trouble qualifying at their banks. That’s where SBA loans can help. Backed by the U.S. Small Business Administration (SBA) and available through banks and community lenders, these loans can be a boon for food and beverage startups with high capital costs and limited financing options.

SBA loans are designed for different needs and stages of business. The 504 Loan Program, for instance, is designed to finance the purchase of fixed assets, such as real estate and machinery, at below-market rates. 7(a) and Community Advantage loans offer funding that can help you get up and running. Learn about SBA loans through NYBDC, and see what you may qualify for!

2. You Guessed It — Crowdfunding!

Crowdfunding is a great option on its own, or in combination with other funding sources. At PieShell, we’ve had food and beverage entrepreneurs crowdfund to upgrade equipment, scale operations, move from online to brick and mortar, and even develop and launch a completely new product!

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For those new to crowdfunding, it’s a way to raise money through your online community and personal network by offering gifts in exchange for relatively small contributions. Crowdfunding is best for raising amounts less than $25k if you are a consumer product, or in the $75–100k if you are a restaurant. Our 5 inaugural PieShellers have already raised over $66k thanks to their unbeatable hustle and thorough marketing plans.

The PieShell team is here to help you with any questions you may have about crowdfunding. Email us at!

3. Nontraditional and Online Lenders

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In general, it’s good to be extra cautious when considering alternative and online lenders. While they offer benefits like looser requirements and faster application turnaround times, they typically come with high interest rates.

The food + beverage community is lucky to have resources like NYBDC to help vet these options. We suggest looking into NYBDC affiliate Excelsior Growth Fund (EGF), a not-for-profit organization with an online small business loan offering that is responsible and affordable.

4. Micro-Lenders

Micro-lending became popular as a way to build communities across the globe. Throughout the U.S., you may be able to receive a microloan through a Community Development Financial Institution (CDFI). These are mission-driven financial institutions certified and backed by the U.S. Department of the Treasury.

The maximum amount that can come from a CDFI is $50k, but the typical amount borrowed is about $13k. Locate the CDFI closest to you using this helpful list!

5. Grants

If you thought that grant funding was just for nonprofits, think again! Unlike loans, grants don’t need to be repaid, so there’s no worry about term length, interest rates, or refinancing.

There are a variety of grants that you may qualify for as a small business owner, though you may have to hunt around to identify them. One example is the Craft Beverage Marketing Grant Program for wine, beer, spirits, and hard cider produced in New York State.

6. Bank Loans

Like we said earlier, bank loans aren’t always an option for food and beverage (especially startups), which is considered to be a risky industry by investors. But, it’s important to scope out all your options.

While banks offer some of the lowest cost loans available, about 72% of small business owners who apply get rejected. We encourage you to look into local options since they tend to be more willing to invest in community development.

NYBDC Is There to Help!

Finding funding can sometimes feel like you’re trying to run an obstacle course while blindfolded. Ok, we’re exaggerating a little bit, but it’s not easy! That’s why we’re here to help. Together with our fantastic community partners like NYBDC, we’re pooling resources and expertise to support a vibrant (and growing) community of food and beverage entrepreneurs. Stay tuned for more helpful blog posts and learn more about NYBDC here!

Are you thinking about crowdfunding your business? Reach out to us at PieShell and let us help you understand if it’s the right choice for you.