Local liqueur company Lombardi closed shop this month, falling victim to banks' cautious small business lending practices. Nick Lawrence and a partner started Lombardi in Little Rock in 2007, shortly after Lawrence's primary employer, Delta Airlines, filed bankruptcy.
"I'm a pilot. My salary was sliced, my pension gone. I needed look into something else," said Lawrence, a Little Rock native.
His business partner had a recipe for limoncello, so they decided to mass-market the liqueur. The company offered three lemon liqueurs, but it's signature product was Lombardi Cream of Limoncello.
Lawrence originally entered the business as an investor, with no intention of actually running it. "But it became clear that someone needed to run the business, so I bought the guy out," he explained.
For the past two years, Lawrence has kept up his flight schedule while overseeing the liqueur company. It was a small operation with three fulltime employees at its peak. Finding capital became increasingly frustrating.
"Banks weren't willing to help. Every bank I went to said that there wasn't enough cash flow. Isn't that against the principle? If we had the cash flow, we wouldn't need the loan. Even our mortgage lender refused to give us a loan, despite the fact that they had equity in our building," Lawrence said.
He had verbal agreements from two private investors but nothing in writing. The second investor backed out after Lawrence spent $50,000 renovating a warehouse in North Little Rock. He purchased the warehouse three years ago, hoping Lombardi would grow to fill it. "We didn't own our Little Rock building, and this guy offered to pay for the renovations in North Little Rock," Lawrence explained. The company relocated two months ago. But when construction began, the investor panicked. Lawrence took his plight to the Chamber of Commerce.
"The city of North Little Rock has been nothing but helpful. Mayor Hays even wrote a letter to banks, asking them to give me the loan," Lawrence said. "It's kind of surprising that they wouldn't, despite all the small business incentives." He needed the money for a national ad campaign. Lombardi was already distributed regionally, but to truly make profit, Lombardi had to have national distribution.
Finally Lawrence gave up. "It just became evident that I wasn't going to get any capital," he said. So when local bars and shops run out their current stock, there will be no more Lombardi Cream of Limoncello.
According to Lawrence, he's relieved that he no longer has to handle the company. "It's time for me to get back to being a pilot," he said. "I've tried running a business, and I doubt I'd do it again."
As for the building, "I think I'll just give it back to the bank that wouldn't give me a loan."