Here are four examples of how business lifecycle advisory and industry specialization combine to create customized solutions for individual business needs.
1. Generating sufficient cash flow in the early stage
Launching a business is a capital-intensive undertaking. Depending on their experience level, some business owners may need guidance on how much capital they’ll need to raise and what assets they need to secure credit. Matthews says that was the case for one client he supported: a master distiller and master blender at a heritage bourbon brand who sought advice on creating their own distillery.
Finding ways to generate enough cash flow to service the debt was key. Matthews’ industry knowledge told him that the distillery’s whiskey would need to age for at least four to eight years before building value. He devised a tailored solution that allowed the company to presell production and secure future revenues.
“We spent two-plus years working with them, helping them build their model from scratch,” says Matthews. “We were able to introduce them to folks within our network so they could presell production for a distillery that hadn’t even broken ground yet.”
2. Financing growth opportunities
Whether you have a detailed growth plan in place or need help sizing up trends in the marketplace that could lead to growth, your Truist relationship manager can be an invaluable source of strategic advice.
Matthews says growth was top of mind for client Whiskey House from the time the company’s founders broke ground on a new contract distillery.
“They had taken a huge leap of faith by starting construction on a $100 million facility when they hadn’t yet raised all the capital they would need to complete the project,” says Matthews. “When we found out they’d already presold about 90% of the company’s first five years of production, we were confident they could execute.”
Truist helped Whiskey House secure financing to complete construction, access working capital to get the business operational, and fund investments in technology that create a platform for future innovations.
3. Navigating a business transition
A business transition may mean selling to new owners or passing the family business to the next generation. Or it may involve reinventing the company to stay competitive or serve an underserved market. Whatever the situation, Truist relationship managers can help you explore options and pinpoint strategies to help you meet your goals.
Matthews says transition planning was the focus when his client, one of the nation’s largest whiskey barrel brokers, wanted to transform the business by expanding into barrel storage. The company had an opportunity to buy another distillery’s rickhouses, which they planned to fill with the whiskey barrels of customers who pay a management fee.
“The biggest challenge was making sure the company could fill the rickhouses, because if they sit empty, there’s no cash flow,” says Matthews. “Our industry expertise and knowledge of the contract distilling space helped assure everyone involved that the client’s strategy was sound.”
4. Finding specialty financing
Sometimes, traditional financing isn’t enough to help businesses fund their objectives. Matthews uses client Blue Run Spirits as an example of Truist’s creativity and flexibility in financing in the beverage industry. The distiller was experiencing rapid growth due to a successful online marketing campaign and needed funding to expand.
Matthews introduced the company to Truist’s barrel financing program. Since Blue Run didn’t yet have its own distillery, this innovative funding allowed it to meet customer demands by buying whiskey barrels on the open market or from contract distillers and then blending them in-house. As the whiskey ages and rises in value, Blue Run’s barrels can be independently appraised, allowing the company to access future capital.
“A barrel of whiskey is worth the least the day they pour the whiskey inside it,” says Matthews. “This financing program allows our clients to tap into that earned appreciation as the barrel ages. It’s a great example of how industry specialization adds value to the financing solutions I can bring—making them truly custom to each client’s circumstances.”
