By DAVID GEFFNER

Contributing Reporter

Christian Frizzell is a veteran of L.A.’s bar scene.

For the last decade, the 31-year-old has managed or consulted for trendy nightspots such as Good Luck Bar and Three of Clubs, where he met his partner Dev Dugal, 28, a former software developer with an M.B.A. from Pepperdine University.

The duo decided to form a partnership to buy their own bar and were already in escrow on a location in the Mid-Wilshire district when they fell in love with the Redwood Bar and Grill, a one-time downtown hotspot.

The former Redwood Saloon served John F. Kennedy, Richard Nixon, and most of the L.A. Times news staff in its heyday. The only problem was the Redwood had been shuttered for over a year.

“The Redwood had a grandfather clause which allowed it to be reopened as a bar/restaurant if it was done within two years,” Frizzell recalled. “Most of the $800,000 we needed to re-open came through private investments. But the $20,000 SBA loan was key to our long-term plans. It established viability with the bankers, and gave us access to incentives the city was offering to small business owners moving downtown.”

Frizzell and Dugal were steered toward an SBA Community Express Loan, through Audrey Madrigal and Warren Cooley, project coordinators for downtown’s historic retail district working at the Valley Economic Development Center. Frizzell heard about the development center while working for the Golden Gopher, another downtown bar and lounge that used SBA programs.

The express loan is typically given to novice borrowers such as Dugal who have no previous ownership experience and will benefit from technical assistance both before and after the loan has closed, usually from a non-profit entity such as the development center. The development center’s Capital Access Center packaged the loan, guaranteed by the borrowers’ personal property, through Innovative Bank.

“The Community Express Loan came through late in the game,” Dugal explained. “We had intended to have a cash register system, but being a bar/lounge with banquet facilities, we realized that we needed to upgrade to a restaurant POS (point-of-sale) system, which cost roughly $20,000. Construction expenses were higher than we had anticipated and by that point, we were really strapped for funding to make our opening.”

Dugal said the development center helped them fine tune their pro forma statements and projections, as well as introduce them to the City of L.A.’s enterprise zone program, which includes tax breaks and incentives. The development center also made sure reps from mayoral and City Council offices were present at the Redwood’s grand re-opening.

“The interest rate with an SBA loan was a little higher than going with private money,” Dugal said. “But the whole process was so smooth that we’d like the funding ratio for our next bar to be higher from SBA and lower from the private lenders, who always have a de facto voice into the choices we make.”