General manager George Lewallen turns on the lights in the window in the new addition to the Tremont Tavern on Wednesday, Dec. 2, 2015, in Chattanooga, Tenn. Remodeling was done with help from the Small Business Administration's Community Advantage program. Nine years after Dustin Choate gave up his pharmaceutical sales job to open up one of Chattanooga's first taverns offering a variety of craft beers, the Riverview bar and restaurant is doubling in size to accommodate its growing appeal.
Tremont Tavern, the 55-seat neighborhood bar at Hixson Pike and Tremont Street, expanded Wednesday into an adjacent storefront using funds as the first Tennessee recipient of a new type of a Small Business Administration loan. Choate said the remodeled former antique store will add more seating, bar space and kitchen facilities for the popular eatery to grow its food and bar business as well as add a new catering service.
"We've grown the business tremendously, especially in the last three years when we have grown at an annual rate of more than 30 percent, and we just need the extra space to serve all of our regular customers and everyone else finding out about us," Choate said Wednesday afternoon as he prepared to open the newly expanded bar. "In addition to giving us another 35 seats to help handle the crowds at night and on weekends, this will also allow us to begin to offer a catering business, which we've had a lot of demand for but we just weren't able to offer in the past."
Choate, a Winston-Salem, N.C. native, brought North Carolina's early fervor for craft beers to North Chattanooga in December 2006 when he opened Tremont Tavern in a former restaurant site where a number of stores had tried and failed to make a go. Choate made his bar smoke free, and soon developed a popular menu of burgers and other food that have grown to become the biggest share of his business.
"I lived just up the street on Tremont and I just knew there would be a strong market for a neighborhood bar where people felt comfortable coming to and having a craft beer," he said.
Tremont Tavern offers more than 100 different brands of beers, including 21 on tap.
To expand the tavern, Choate tapped into a new type of federal loan offered in Tennessee by the Chattanooga-based Brightbridge, a not-for-profit certified development company. The SBA Community Advantage loan provided Choate a $150,000 loan at a 7.25 percent rate to help fund the bar expansion into the leased building space next door.
Mike Ohlman, director of SBA lending for BrightBridge, said small business loans are often difficult for restaurants, service companies and other small businesses that don't have significant collateral in rented buildings.
Walter Perry, district director of the U. S. Small Business Administration, Hale Booth, CEO of BrightBridge, and Tremont Tavern owner Dustin Choate, from left, are talk in the new addition to the Tremont Tavern on Wednesday, Dec. 2, 2015, in Chattanooga, Tenn. The new addition to the popular North Chattanooga business was funded with with a loan from BrightBridge through the Small Business Administration's Community Advantage program. "This is a strong cash flow business and we are able to make this type of loan knowing the business and the character of its owner," Ohlman said. "A lot of times these type of businesses either can't get a bank loan for this type of expansion or they have to pay a much higher borrowing rate."
Tremont Tavern has grown to 25 employees, Choate said. The entrepreneur also is a partner in the 250-seat Feed Company Table and Tavern which opened on Chattanooga's Southside this summer.
BrightBridge is the first lender to make the Community Advantage SBA loan in Tennessee. But Ohlman said a handful of other similar loans are now in process. Such loans can be up to $250,000 and usually don't require as much collateral as other small business loans.
Gary Moore, a business development representative for BrightBridge, said he has met with banks across Tennessee to try to expand the program. BrightBridge makes the loan and generates fee income from the loan processing. But the nonprofit lender is not a depository institution so banks can work with BridgBridge to help their customers grow and still handle their checking and other banking services, Moore said.
Walter Perry, the Tennessee director for SBA, said he hopes to grow the Community Advantage program that SBA began three years ago. Even without much Community Advantage loans yet, Perry said the volume of SBA loans in the Volunteer State has jumped 40 percent this year over last.
Although Tennessee is just making its first Community Advantage loan, the program grew 83 percent in the rest of the country over the past year to more than $100 million.
"I think a lot of people are seeing that small business ownership is for them if they are wanting to build a business or try out their idea in the marketplace," Perry said. "And those who have been in business like here at the Tremont Tavern are looking to expand because their volume is up and, in this instance, they need more seats. If a business is having good positive cash flow, then that's something a lender ought to be able to look at and work with a business to help them grow and help expand the overall economy of our state."
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.