Accessing Capital Despite Barriers: Four Borrowers’ Perspectives
Oakland Entrepreneur Brews Gluten-Free Success with SBA 504 Financing
Read how brewer and small business owner Michael Bernstein of Buck Wild Brewing in Oakland used his SBA 504 loan to purchase Buck Wild Brewing’s brewhouse, brewing equipment, and fund the construction of Buck Wild’s taproom, lounge space and offices.
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Creating great-tasting gluten-free products has challenged food and beverage manufacturers for years. Craft beer has been no exception. Until recently, Michael Bernstein, owner of Buck Wild Brewing in Oakland, California, finally discovered a formula that packs a flavor punch while still delivering a healthful dividend.
“When I first started brewing beer in my garage and kitchen, the flavor bar for gluten-free beer was pretty low,” Michael said. “My wife and I had adopted a gluten-free diet and quickly realized that flavorful options for gluten-free beer were nonexistent, particularly in California.”
Missing the delicious taste of craft beer (which contains the gluten protein found in its key ingredients like barley and wheat), Michael set out on a mission to create a 100 percent gluten-free alternative that was enjoyable to drink. After several years of homebrewing – during which he taught himself to also malt gluten-free grains by soaking, sprouting, drying, and roasting the grain – he took his skills and entrepreneurial ambition to the University of California at Davis. At UC Davis, Michael worked with the staff of their Master Brewing Program to scale his recipe and process so that he could then pursue brewing his gluten-free beers on a commercial scale.
Buck Wild Brewing owner Michael Bernstein at his brewery in Oakland, CA.
The Buck Wild Brewing team.
Experimentation Yields Healthy, Tasty Beer
After much trial and error, Michael finally brewed a batch of gluten-free beer that rivaled the great-tasting craft beer he had been missing since going gluten-free a few years prior. He routinely conducted blind tastings with friends, and their positive feedback validated that what he had produced was not just drinkable but delicious.
Throughout that time, Michael was tirelessly pursuing his interest in gluten-free beer and working in financial services in the Bay Area.
“I got to the point where I felt stuck in my current role,” said Michael, who earned an MBA in finance from the University of San Francisco. “I didn’t want any regrets when I looked back at this time in my life.”
For a couple of years, Michael straddled the two jobs – financial executive and brewer. Something had to give. When the opportunity presented itself, he took a giant leap and went all-in on creating Buck Wild, California’s original gluten-free brewery.
Initially, Michael contracted with a San Jose-based brewery to bring Buck Wild beers to market. Then in 2018, he fell in love with an historic building in the city of Oakland’s Jack London Warehouse District. After getting the keys to Buck Wild’s new home, Michael set out to transform the beautiful 1946 warehouse into what it is today…a dedicated gluten-free production facility and taproom, California’s first. The thriving neighborhood where Buck Wild Brewing is now located boasts a plethora of waterfront condominiums, apartments, coffee shops, wine tasting rooms, and a few other breweries.
Perseverance Leads to New Capital for Launch and Growth
Outfitting the new building was an ambitious task. Michael needed capital to buy all the expensive brewing equipment and pay for the necessary tenant improvements. He approached several traditional banks; the answer was always no.
“Although I’d been producing and selling my beer for several years by then, the lenders treated me like a start-up operation and viewed me as high-risk,” recalled Michael. “It was very discouraging.”
Then out of right field came another banker who expressed interest in backing Michael’s project with a Small Business Administration (SBA) 504 loan, which provides long-term, fixed-rate financing for commercial real estate purchases and tenant improvements. The SBA 504 loan requires a partnership between a bank and a nonprofit certified development company. In this case, Michael teamed up with CDC Small Business Finance and Senior Commercial Loan Officer Ed Ryan.
“Michael has a great enterprising spirit,” said Ed. “He recognized a solid product niche in gluten-free beer and went out and made it happen. I’m pleased he could use the SBA 504 program to help realize his dream.”
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Onward to Expansion, Job Creation
Michael used the bulk of his SBA 504 loan proceeds to purchase Buck Wild Brewing’s brewhouse, fermentation tanks, canning line, and other brewing equipment, as well as for the construction of Buck Wild’s taproom, lounge space, and offices.
“Michael has a great enterprising spirit. He recognized a solid product niche in gluten-free beer and went out and made it happen. I’m pleased he could use the SBA 504 program to help realize his dream.”
Ed Ryan
CDC Small Business Finance Senior Commercial Lender
With COVID-19 waning, things are looking up. Michael is focused on growing the Buck Wild brand, creating new jobs, and expanding distribution. His four core beers – Alpenglow Hazy IPA, Rogue Wave West Coast IPA, Conifer Grove Pale Ale, and Gold Shine Kölsch – are available in major retail outlets, including BevMo!, Safeway/Andronico’s and Total Wine, along with dozens of Bay Area bars and restaurants. For variety, Michael now utilizes different roasts of malted millet, rice, and buckwheat as the key gluten-free ingredients to produce his uniquely-delicious craft beers that everyone can enjoy.
“My goal is to go statewide, then beyond, with Buck Wild,” Michael said, adding that he expects to increase his production from around 1,000 barrels this year to 2,200 in 2023. “It’s a volume-based business and will take time, but we’ll get there.”
Learn more about the SBA 504 loan program. Find one of our SBA 504 loan experts in your area who can talk you through the advantages of owning versus renting.
