The leaders of Leff’s Lucky Town in Wauwatosa and Revere’s Wells Street Tavern in Delafield have been approached on a monthly basis over the years to buy other restaurants in southeastern Wisconsin.
But it wasn’t until they came across a historic firehouse in downtown Menomonee Falls that they felt the site was the right theme and location for their next venture.[caption id="attachment_342132" align="alignnone" width="770"] A rendering of the planned renovation.
“We’ve looked over the last 20 years at a lot of different properties and projects and none of them really struck us as, ‘Wow, this is the place,’” said Mike Szohr, a longtime Leff’s employee and one of the owners of the new establishment. “We saw that this historic firehouse really had a character in and of itself. Menomonee Falls is a real up-and-coming municipality and the right building was there.”
The two-story, 9,000-square-foot building at N88 W16631 Appleton Ave., formerly fire station No. 1, will have a banquet space upstairs and a main floor bar and restaurant. Falls Fire LLC, owned by Leff’s and Revere’s owner Chris Leffler, will operate the restaurant, which will serve American fare with a twist.
But before it can open, hopefully in fall 2018, the firehouse needs to be converted into a restaurant.
Part of the financing for the renovation and equipment is expected to come from a $1.1 million SBA loan, which the owners have applied for from Oconomowoc-based First Bank Financial Centre. The total project cost is about $1.7 million, and will also be aided by owner equity and historical grants, Szohr said.
“We applied for a traditional loan and the bank that we were working with thought this would be the best route to go,” he said. “It wasn’t very difficult, just a lot of paperwork, a lot of documents, a lot of historical data.”
The Leff’s group had never applied for an SBA loan before, but with the help of the financing, they expect to create 50 jobs at the new restaurant.
Every month, about 50 companies in the eight-county southeastern Wisconsin region receive loan guarantees from the U.S. Small Business Administration to finance everything from construction projects to new restaurants to acquisitions.
While the number of SBA loans issued in Wisconsin fell 7.5 percent and the amount lent was about flat from 2016 to 2017, the figures increased in the first quarter of fiscal 2018. In the SBA’s fiscal first quarter of 2018, which ended Dec. 31, the number of SBA loans issued in Wisconsin was up 18 percent and the total amount lent was up 11.6 percent compared to the first quarter of fiscal 2017.
When the economy is booming, banks sometimes lean toward more traditional loans and fewer SBA loans, so the fact that SBA lending has increased while the economy is doing well is a good sign, said Shirah Apple, public information officer for the Wisconsin District SBA office.
“Things seem to be going fairly well in the economy and there’s room for growth and people are taking advantage of our lending programs, so there’s some optimism on the business side of things,” she said.
SBA loans are available to most for-profit U.S. businesses that qualify as “small,” which is generally fewer than 500 employees via the 7(a) or 504 programs, she said. There are about 350 SBA lenders in Wisconsin, and about 170 of those made loans in 2017, Apple said.
Business owners can speed the process by having all of their materials ready, including a business plan that reflects their vision and their finances, with financial projections. Other items to have on hand are three years of financial statements, a balance sheet, an income statement, tax returns, debt information and accounts receivables.
“The more ready you are when you go to the lender, the more likely that it will be approved quickly,” Apple said.
Locally, several well-known businesses got started with SBA loans, she said. Among them are acclaimed restaurant Sanford on Milwaukee’s East Side, MobCraft Brewing in Walker’s Point, New Berlin aviation manufacturer Emteq Inc. and West Allis construction and power tools wholesaler Diamond Discs International LLC.
Businesses of all ages can take advantage of SBA loans, said Denise Hegland, vice president and relationship manager in business banking at JPMorgan Chase in Milwaukee.
“A lot of people equate SBA with startup financing and that’s not really 100 percent true,” she said.
It’s often used for capital injections in real estate projects, for established businesses in higher risk industries, to finance acquisitions or to enhance the structure of a larger financing package, Hegland said.
SBA loans can help extend an amortization on a loan to help monthly cash flow and sometimes allow a business owner to complete a project or purchase equipment with less equity in the purchase, Hegland said.
“It’s a program that exists to help small business owners’ dreams come true,” she said.