March 2014

Anticipation of Spring Gathering Recap
By Kristin Gangwer

Local Loans for Local Foods: A Slow Money Group (LL4LF) held its 6th networking mixer on March 16th, drawing 20 enthusiastic community members and food producers together to discuss funding strategies for local farms and food businesses. Nationally, Slow Money groups have helped facilitate over $30 million in loans to small farm and food enterprises around the country. Our local chapter, LL4LF, has prompted $56,000+ in low-interest, peer-to-peer loans in this region. Michele Bertaux, CPA and Steering Committee member, gave a brief overview on funding strategies for local businesses that don’t involve using a loan. She reviewed the approaches listed below, and a lively discussion followed.

  • Patronage Purchase: the power of your purse
    • A network of support (broad customer base) is resilient and important
  • Pre-Pay: sell product in advance
    • One example is the traditional Community Supported Agriculture (CSA) model, another is the farm loan/share example listed under the Resource Library on the LL4LF site
  • Gifts/Donations: give freely
    • Can be tax deductible or not, depending on the type of entity
  • Royalties: tie repayment to capacity
    • Schedule payback out of profit, when it occurs
  • Loan Guarantee: either as an individual or a group
    • Provides security for a bank or credit union loan, helping the institution provide capital, often for a larger loan amount
  • C-Corp: roll retirement money into your company 401k
    • You might free up $ from a retirement plan to grow your own business

Though no producers gave formal presentations at this gathering, a number did attend, including Bearfoot Farm out of Hamilton, OH (mhilbert.cstate@gmail.com); Grassland Graze out of West Chester, OH (http://www.grasslandgraze.com/);  and The Organic Farm at Bear Creek out of Felicity, OH (http://organicfarmatbearcreek.com/).

The next LL4LF event will be held this summer, ideally on-site at a local farm or food business that is currently looking for funding. Please contact us if you are interested in hosting such an LL4LF gathering at your farm or place of business.

As always, thanks very much to everyone who attended this event and made it such a success!

(Michele Bertaux can be reached at michele.bert.zab@gmail.com if you have questions or are interested in receiving more technical information about funding mechanisms.)

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