How The International Beer Bar raised CHF 102’000 with 3CF

Funding strategy

What is MGC Gastro AG?

In December 2014, MGC Gastro AG opened The International Beer Bar in Zurich’s vibrant Kreis 5. Because MGC Gastro is known primarily for their one business, we’ll call them “The International Beer Bar” (IBB) in this article. The bar quickly established itself as Zurich’s premier purveyor of craft beer. They moved into a small space in a new-build, which was an ideal size for the concept. However, after three years in business, they realized that numerous areas could be optimized from seating to refrigeration. They priced out the work and knew they needed to raise 100’000 francs for the renovations. The hope was to make the space more comfortable for guests, have more seats and lose less beer to foaming.

The International Beer Bar run by MGC Gastro AG raised over CHF 100'000 to renovate, increase revenues and decrease operating costs.
The International Beer Bar in Zurich’s Kreis 5

Why did The International Beer Bar not get a bank loan?

The International Beer Bar checked with their bank about a business line of credit. The bank told them that despite three years of financials, they were not established enough. Furthermore, being in gastronomy made them high risk and that when they were eligible they would pay over 7.5% interest – at a time when the banks were offering under 1% to people with money in the bank.

Why did The International Beer Bar use 3CF?

That is when The International Beer Bar came to 3CF. The appeal of 3CF is that the platform allows users to set the terms of their own loan – especially the loan interest rate themselves. They did the math and knew what kind of monthly repayments they could comfortably afford based on their revenues. They put up the campaign and got approved for a loan of CHF 100’000. Their terms were 4.5% over five years, and as a bonus, anyone lending over CHF 5000 would get 20% off tap beer when they visited the bar. In this way, MGC Gastro also sought to make their lenders into fans and supporters of the business.

How did The International Beer Bar raise CHF 102’000?

Getting CHF 100’000 with the newly established 3CF was no easy feat. The International Beer Bar put their trust in the platform and went about talking about it with their customers. They built an informational page on their website and wrote about their campaign on Social Media, in newsletters and even printed posters. Over three months, patrons of the International Beer Bar and their friends decided to show their support for the craft beer bar by funding them.

What is the deciding factor when it comes to Crowdfinancing?

A deciding factor in crowdfinancing is communication. Excellent communication is the result of a convincing story. The International Beer Bar was concrete in describing to their lenders what they planned on doing with the money and why they were doing it. Clarity is essential to lenders as it builds trust and allows them to evaluate how the money will be used. Lenders in the peer-to-peer lending market (crowdfinancing) are not just looking to make good returns; they also want to support local businesses and people. If you tell them how the money will be used, they will be more likely to lend to you.

What did The International Beer Bar like best about the 3CF platform?

The International Beer Bar used 3CF’s clear repayment plan to show lenders how they would get their money back and how much interest they would earn on their investment. “The transparency of the 3CF platform was a deciding factor for us choosing 3CF,” said the COO, Christian Langenegger. We broke the numbers apart for our investors and continually updated them on the status of our campaign. Once we reached the 50% mark, things sped up quickly, and we got the other 50% plus an additional CHF 2’000 within a week.

How have the repayments with 3CF been for The International Beer Bar?

“The renovations we wanted to make took about six months longer than anticipated. Because of that, we were happy that we took the 6-month interest-only option that 3CF has for business borrowers,” recalls Christian. The repayments have been easy. We set up a standing payment with our bank, and every month the money gets transferred to 3CF, who makes sure our lenders are repaid. We don’t even think about it anymore.

Have Beer Bar lenders sold loan parts?

After two years, one lender in The International Beer Bar sold his loan part after relocating outside of Switzerland. 3CF’s secondary market made that simple and the loan part sold within a few days. The buyer was an existing lender, who decided to take advantage of the offer and then sold it to a friend within a few months. All of this happened without The International Beer Bar needing to do or change anything.

Would The International Beer Bar recommend 3CF?

“We would highly recommend 3CF to any SME looking for financing,” said Christian. “It was a big undertaking, but we are delighted with the results and so are our patrons. Businesses and individuals should know that Crowdfinancing is a great way to connect with the people behind money. You need to communicate with them and remember they are putting their trust in you. That trust must be earned, and the best way to do that is to be open and honest. Communicate often and clearly,” added Christian.

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