When small business owner Scotty Baragwanath needed $300,000 to fund his start-up cereal business, he realised pretty quickly he wasn’t going to get money from the bank.
It wasn’t that he didn’t have business experience or an understanding of what customers want to eat. After 20 years with confectionery giant Mars, Baragwanath knew plenty about food products and consumers.
He reckoned his flavoured porridge and gluten-free cereal brands would work well both in New Zealand and overseas.
What Baragwanath didn’t have was his own home. He and his wife used to have a house in Australia, but they sold it in 2015 to get capital to start their business, Blue Frog.
Since then the couple and their four young children have rented in Auckland.
Which meant, in the bank’s eyes, they didn’t have any security for a business loan.
Which meant no bank was going to give them money. Period.
After a couple of chats with bank managers, where the sum total of their offering was an extra $2500 on his credit card limit, Baragwanath went elsewhere, raising the funds he needed from private investors. . . . . .>