After Jacob left, Armando stood in front of the whiteboard explaining the circumstances to Chloe and me, who had sat back down in the study room.
“Listen… I’ve told you a few times already, but I wanted to build a farm of my own. But I’m not oblivious to reality, so I was just dreaming about it, you know? You know I studied hard.”
“I know. I just don’t know about your grades.”
“They weren’t bad objectively. It just seemed that way because you’re a monster. How do you get perfect scores on every exam when you’re farming like this and not even properly attending school? No matter how Asian you are, this is unfair.”
“……Anyway, that’s not important, so pass.”
“Yeah, pass. So anyway, I stopped by a real estate agency when I was bored and asked if any good farms had come on the market.”
As expected… it made no sense that he would mention a $1.1 million property including a winery right away when vineyard listings weren’t even publicly posted at the school. It was easy to understand if you imagined a student in Korea saying they were going to build a brewery and taking out a loan of over a billion won.
Chloe clicked her tongue.
“And here you are, a student, nurturing a dream with an actual $1.1 million property… You don’t know that a student can just as easily go under if they fail to repay even a $10,000 debt?”
“Hmph! I probably know that better than you? That’s why I was just watching and waiting. I was only nurturing the dream. Because it’s hard to pay back a loan just selling grapes.”
That was right. The most decisive reason the previous owner of Redwood had failed to properly operate the farm was that he couldn’t make wine well. Because it was difficult to turn a profit just selling grapes.
Armando couldn’t confidently persuade his parents because he couldn’t yet prove his winemaking ability to them.
Chloe crossed her arms at Armando’s protest and nodded as if she understood.
“But vinegar is different?”
“Exactly! If my friend Brian teaches me his vinegar-making method, I can just make it exactly like that and sell it. The existing customer base that already loves the vinegar is already secured, and I just have to continue it, right?”
“But then it won’t be Redwood Vinegar anymore. Even the farm name will be different, won’t it? Don’t tell me you’re going to sell it under some name like Armando Vinegar? Nobody will buy it.”
At her sharp question, Armando suddenly choked up and looked at me. A look asking if there was no way around it.
“We’re splitting it 7:3 anyway, right? If I hold the brand and have Armando do OEM production, there’s no legal problem.”
“Ooh—exactly!”
Armando beamed again at my words, delighted, and then said:
“I looked into loans too. With the Beginning Farmer loan and a 5% down payment program, you put in at least 5% equity, the FSA lends you 45% of the purchase price at a low interest rate, and the rest can be covered by a commercial bank or seller financing!”
I was impressed by Armando’s preparedness.
“You really looked into a lot.”
“Of course. I wanted to be perfectly prepared. I even found out that funding for Socially Disadvantaged groups is possible. Hispanics and Latinos are included as SDA under the law, right? But the Beginning Farmer loan and down payment program were the best.”
It was the same loan structure my family had received when acquiring Redwood.
Chloe’s eyes sparkled, as if this was exciting.
“Then when are you going to acquire it? Are you going to the bank right now?”
Armando hesitated and looked at me.
“When do you think is good?”
I scratched my head, hesitated, and said:
“It’s hard for me to say anything rash since this isn’t my business… but the cheapest time to buy would probably be winter, and it’ll keep rising from now until before the harvest. It might even exceed $1.4 million. Did you find out why they’re selling?”
“Yeah, it’s a small farm but they cultivate two varieties, Cabernet Sauvignon and Merlot, and I guess they’re struggling because the prices aren’t rising. So they sell wine to passing tourists and run grape-growing experiences, but that’s hard too.”
“What about last year’s wildfire?”
“Fortunately, it passed right by next to it. The neighboring farm burned instead, they say. But I don’t necessarily believe that. I haven’t visited the farm myself; I just heard it from the real estate agent.”
Going all the way to check the farm when he didn’t even have the money would have been odd, beyond the realm of mere interest.
“Then you’ll have to make vinegar by blending the two varieties.”
“Is that bad?”
“Not particularly… It just means the sugar content and acidity will change, so some adjustment is needed. It’s not to the point of being a problem. Maybe you can age it even longer than here, which could improve the flavor.”
“Ah, that’s right. At Redwood, we have to empty the stainless fermentation tanks for the next batch, so we can’t keep using them only for vinegar. If we make only vinegar, we can set a longer aging period.”
“Did you say 13 acres? Hmm… if blended with Merlot, it should easily yield about 40 tons. If we convert all of it to vinegar, annual revenue would be at least $400,000. Maybe close to $450,000?”
Armando’s eyes widened and he nodded vigorously, agreeing with me as much as possible.
“Assuming fixed costs and that Mr. John Anderson continues distribution, at least… $250,000 would remain every year.”
The excited guy clenched both fists and said:
“If I have room to spare, I could bring in grapes from other farms like you do and make vinegar, which could leave me with even more.”
“That’s right.”
“Hehe… How about it? Isn’t it doable?”
“I mean, it is doable, but…”
“If I want to buy, I have to buy now?”
“That’s also true, but…”
“Forget it! I’m going straight home, so Chloe, make me a contract like you did for Jacob. I have to show it to Mom and Dad, so make it formal and clean. Got it?”
“……”
“I’m off!”
Armando gathered his things and stormed out. As I blankly stared at his retreating figure, Chloe spoke as if amused.
“You made him like that.”
“Me?”
“Yeah. You showed him success perfectly from right beside him. And among us, Armando has the lowest risk. The growth expectations might be low, but being stable is probably more important to Armando?”
“You’re probably right.”
There was one thing I couldn’t help but admit, if nothing else. That at his age, he could become the owner of a farm worth over a million dollars. Since I knew what that meant, I could fully understand why Armando was so excited.
---
Downtown Sacramento, inside a Rabobank branch surrounded by glass walls. Jacob felt his palms growing sweaty already in front of the loan consultation booth. Inside the thick blue folder were USDA NRCS documents, SBA (US Small Business Administration) loan application forms, and even a copy of the TTB DSP permit that had arrived by mail a few days ago, all neatly arranged.
“Hey, are you okay?”
Mrs. Maggie, sitting next to her son, asked in a small voice. As befitting a farmer’s wife who had nursed her sick husband, she was an ordinary housewife in a simple dress, clutching a worn wallet in her hand.
“Mom, I’m fine. I’m just nervous.”
Jacob forced a smile, but his heart pounded like a drum.
A moment later, the consultation room door opened, and a middle-aged bank employee came out and gestured. On his name tag was written: [Richard Collins – Loan Officer].
“You’re Jacob Miller, correct? Please come this way.”
The consultation room was compact but clean. A monitor and electronic signature pad sat on the table, and on the wall hung a framed phrase: [Agricultural financing is the future of the community]. It was fitting for a bank specializing in agricultural finance centered on California’s Central Valley.
Richard took the file and continued speaking.
“Sacramento Valley Distilled Spirits Plant. You’ve received your distillery permit? Your age… your birthday has passed. Twenty-one?”
Jacob flinched for a moment but nodded.
“Yes, that’s right. But I’m not doing this alone—I’m preparing it based on a partnership with our family farm. The raw materials are already secured.”
“What’s the farm’s name?”
“Golden Grain Soju House.”
Richard made a note with a suspicious glance, then looked toward Mrs. Maggie.
“Ma’am, you’re accompanying him as a guarantor, correct?”
“Yes.”
“Your son is requesting a considerable amount. $500,000 in initial facility costs, and up to $750,000 including operating capital. Do you know how big a risk this is?”
Mrs. Maggie caught her breath for a moment. Truthfully, she didn’t know exactly. She could only think of farm expenses like tractor costs and fertilizer prices. But her eyes were firm.
“Yes, I know. But my son will definitely succeed. Even after his father fell ill, he led the farm alone. He endured hard times, and now he’s trying to start something new. He buys all sorts of Eastern distilled spirits at home to taste them because he wants to make distilled liquor. I believe in my son’s passion.”
Richard nodded, then tilted his head as he looked at Jacob for a moment.
“Having the permit is a good sign, but the distilled spirits market is volatile. Unlike a winery, the payback period is long compared to the initial investment. Moreover, you don’t have any sales contracts yet?”
Jacob took a breath at the sharp question. It was time to say what he had prepared.
“That’s correct. We don’t have contracts yet. But we are competitive in terms of raw materials. Our farm stably produces 80 acres of Calrose medium-grain rice annually, securing over 400 tons per year. Our production cost stability is guaranteed.”
He took out a chart from the file and handed it to Richard.
“As you can see here, the average unit price for rice farms in California is currently around $280 per ton. Since we cultivate it ourselves, there are no separate purchasing costs. We can convert it directly for brewing. Therefore, we are cost-competitive.”
Richard scanned the chart and nodded.
“What about yeast and brewing technology?”
“My friend Brian Choe, who is majoring in viticulture and enology at UC Davis, will handle consulting. He operates Redwood Winery and has experience making wines that have already been featured in Wine Review West.”
Mrs. Maggie suddenly chimed in.
“I tasted that wine too; he’s a very clever child. He helped when pests hit the farm. If he’s a friend my son trusts, then I trust him too.”
It was an illogical answer in some ways, but Richard smiled and turned his body toward Mrs. Maggie.
“Ma’am, loans come with responsibility in the end. If your son fails, can you handle it?”
Despite the heavy question, Mrs. Maggie didn’t hesitate for a moment.
“Yes, I can handle it. I don’t think he will fail, and even if he does, our son will never give up and will get back up again.”
At that moment, Jacob’s throat tightened. “Never give up” was what his mother always said to him. When his father had fallen ill, when the harvest was ruined, even when debt collection calls came, his mother always said those words.
Perhaps, Jacob thought, his mother had come to believe in her son even more the moment she had been freed from those debt collection calls by succeeding in last year’s farming.
Richard nodded briefly, then moved his fingers over the monitor.
“Very well. Using the USDA FSA (Farm Service Agency) program, guaranteed loans up to $750,000 are possible. However, there are conditions. You must prove 25% of initial operating capital as equity, and submit revenue projection simulations. The repayment period is 10 years, and the interest rate is in the 6% range annually.”
Jacob quickly jotted it down in his notebook. 25% equity. The money he currently held was only a few tens of thousands of dollars at most. But thinking of Brian, Chloe, and future revenue, it wasn’t impossible. No, it was sufficiently possible.
Richard put down his pen and said.
“I can’t tell you the approval status right away, but the documentation is thorough. And…”
He smiled again at Mrs. Maggie.
“You’ve raised your son wonderfully. Getting him into California’s top agricultural college.”
Mrs. Maggie nodded.
“Yes, my husband was truly proud of this child. So am I.”
The moment Jacob heard those words, his vision blurred. His fingertips trembled, and somewhere deep in his chest felt as hot as if scorched by fire.
‘I will definitely succeed, definitely…’