Borrower feature: financing collaboration supports new ownership and expansion at Cloquet business

With 40 beverage flavors plus a wide assortment of breakfast and lunch fare and sweet bakery treats, “variety” is a perfect word to characterize the mouthwatering menu at Bearaboo Coffee Escape in Cloquet, MN.

It is also a fitting descriptor for the financial package that helped Natalie Swanson recently finalize her purchase of Bearaboo. A variety of partners contributed to the deal: Swanson with equity, and Frandsen Bank & Trust, the City of Cloquet, and the Northland Foundation with loans.

After the previous owner passed away unexpectedly in 2019, Swanson began working at Bearaboo Coffee to help his widow manage the business. Although Natalie had a highly successful track record running home-based, direct sales businesses, owning a bricks-and-mortar shop was not necessarily in her sites.

“In the beginning, it wasn’t on my radar to buy Bearaboo. However, our family has always talked about how much fun it would be to own a coffee shop, because my husband and I are big fans,” Swanson explained.

When the late owner’s wife expressed the desire to get out of the business, and quickly, Natalie took the opportunity. Originally it was structured as a contract for deed, and in early 2021 both parties opted to move forward with permanent financing.

Frandsen and the City had already approved loans for purchase of the building and some improvements, with an SBA-guaranteed loan anticipated to cover the balance of the acquisition costs. Unfortunately, due to timing issues the SBA guaranty requirements could not be met. The bank referred Swanson to the Northland Foundation, and the last piece of the financing puzzle was put in place.

Since then, Swanson has added a new dining room, larger kitchen, and much-needed storage by annexing square footage from a former self-serve car wash next door. Future projects on Swanson’s wish list include enlarging the parking lot, as well.

Today, Bearaboo is buzzing with caffeine and satisfied customers. The 22 part-time staff serve breakfast, lunch, and baked goods while keeping the coffee flowing until 6 p.m. daily. Find business hours and more details on Bearaboo’s Facebook page.