WEST LOOP — After opening West Town’s Ugly Mug Café in 2013, owner Mikky Wright has his sights set on a new neighborhood — the West Loop.
Wright is crowdsourcing an $85,000 loan to open a second Ugly Mug Café a few block east of Union Park. Because negotiations with the building's landlord are ongoing, Wright won't disclose the exact location yet, he said.
Stephanie Lulay says the owners have had success with crowd-sourcing in the past:
Wright is seeking money to open the West Loop shop with the help of LendSquare, a start-up that asks community members to fund small businesses with loans that are paid back with interest. Wright has 23 days remaining in the campaign to raise the money.
Crowdsourced loans are a viable alternative to small business loans and a line of credit that may offer a lower rate of interest to the borrower. Those who pledge loans are eligible for special perks at Ugly Mug in addition to interest made on the four-year loan, Wright said.
“I can try to go to a traditional bank, but banks aren’t the ones who make the decisions about [Small Business Administration] funds,” Wright said. “It’s some guy in a windowless office that determines if I get the loan.”
And Wright has evidence the crowdsourcing model works. In March, Wright successfully crowdsourced a $25,000, three-year loan to pay for an oven, back patio and garden improvements at the West Town Ugly Mug, 1458 W. Chicago Ave.
“All investors [in the project] that come in, they take ownership of the café and are proud to say that they were part of the campaign,” he said.
As of Monday morning, Wright’s campaign to open a West Loop shop had received $1,360 in loan pledges, or less than 2 percent of the loan amount he is seeking. In order for the pledges to turn into an actual loan, supporters would need to pledge 80 percent of Wright’s goal before the campaign ends.
While he's a long way from the goal, Wright is confident that the West Loop will support a cafe where "strollers, walkers and dogs are equally welcomed."
“I’m hoping that the neighborhood in which I have great faith sees the opportunity in a thriving, expanding small business that will continue to grow,” said Wright, a Wicker Park resident.
If the loan campaign is successful, Wright aims to open the West Loop café and coffee shop by April 2015. Ugly Mug Cafe in West Town opened in summer 2013.
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