Farmers sign a 9year lease with a fixed price purchase option after 5 or 6 years and at the end of the lease term The goal of each project is transfer of the farm to the farmer We work with local partners land trusts University extension services technical service providers agri ID: 612648
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Dirt Capital Partners invests private capital in farmland in the Northeast United States, facilitating farmland access and security for sustainable farmers with viable businesses.Farmers sign a 9-year lease with a fixed price purchase option after 5 or 6 years, and at the end of the lease term. The goal of each project is transfer of the farm to the farmer.We work with local partners – land trusts, University extension services, technical service providers, agricultural lenders – to position the project for long-term success.
INVESTING IN FARMLAND WITH GOOD FARMERSSlide2
12 FARMS PURCHASED SINCE 20146 Organic Dairy5 Diversified
1 Small Grains
2,000 acres totalSlide3
Relocate an existing farm to a more secure or larger propertyExpand a successful operation by acquiring nearby landTransfer a farm to non-family or family
successors
Conserve when land trusts look to partner with a like-minded organization
Transform
a farm with infrastructure updates for the next generation’s
efficiency
COMMON PROJECT THEMESSlide4
Organic practices, certification not requiredNew England, New York, New Jersey$100,000+ in annual gross revenue projected2+ years of sales, or prior farm management experience and purchasing an established businessProject acquisitions range roughly $200,000-1M
FARMER AND PROJECT CRITERIASlide5
PROJECT PROFILEMoxie Ridge Farm & Creamery Argyle, NY45-Acres of Pasture/Woods, Farmhouse, OutbuildingsCreating a Diversified Livestock, Farmstead Cheese and Agritourism
Operation
Purchase and Expansion of an Existing, Operating Business from a Retiring Farmer Couple
Multiple Project Technical Assistance and Financing Partners: Hudson Valley Agribusiness Development Corporation, American Farmland Trust,
GrowNYC
, Agricultural Stewardship Association, USDA-FSA Slide6Slide7Slide8Slide9Slide10Slide11Slide12
12California FarmLinkSlide13
13
California
FarmLink
links
independent farmers and ranchers to the land and financing they need for a sustainable future.
California
FarmLink
offers training and technical assistance related to land, capital and succession.
A Community Development Financial Institution (CDFI)
Filling the capital gap for farms and ranches in California, with a focus on beginning, immigrant and minority, direct-market and alternative production systems
Initial focus of lending was operating capital; financing for purchase and refinance of land began in 2015Slide14
CDFI provides structure to:Pool capital from diverse sourcesMitigate risks traditional lenders don’t have an appetite forIntegrate “development services” for deal development, risk mitigation and servicing over the life of the loanSlide15
FarmLink’s Path to becoming a CDFI
15
Farmer Education and TA organization founded in 1999
Through provision of education and TA focused on preparing for financing and loan packaging assistance, learned just how limited the options were for small, beginning and immigrant farmers.
2005- 2006 raised $1 million for loan fund
2006 – 2011 loans underwritten and serviced through Cal Coastal, a local, ag-focused CDFI
2011 began direct lending
2013 became Certified CDFI through
Dept
of Treasury
2017 $4 million available to lend
2016 $2.3 million in loan volume
2017 $3.5 million projected in loan volumeSlide16
Access to Capital16“You guys were literally our only option. You didn’t just lend us money, but you understood our perspective, and guided and taught us in the process as well.” – Farmer-BorrowerFarmLink’s
168 loans have supported more than 75 farmers across California. Impacts include:
764 jobs sustained and 196 new jobs created30% average annual increase in gross business revenue
10% average annual increase in family income
More than 85% of borrowers are certified organic farmers.Slide17
17Financing Criteria3 years operating experienceGaps
Price
Down Payment
Experience
Financial Records
Expansion/Projection-based
Succession
Risk profile
Adequate Debt Service Coverage
Deals to Date
Purchases (3)
Participating Lenders (3)
Succession (1)
Down Payment Program (2)
Refi’s (1)
Conventional Residential Mortgage
U
nable to secure financing elsewhereSlide18Slide19
19JSM OrganicsDiverse organic farmStarted in 2012 by Javier ZamoraOperating on 40 acres across 3 parcels prior to purchaseDirect to consumer and direct to retail marketsProperty: ALBA’s Triple M Ranch
195 acres, 60 farmableNatural Resource & Ag Easement, held by Elkhorn Slough Foundation, conveyed with title
5-7 small farmer tenants continued under new ownershipSlide20
20Deal Profile$1.3 million asking pricePartnerships and Capital Stack Critical to DealCapital StackFSA Down Payment Program
5% down
$300,000 FSA Direct Farm Ownership Loan$650,000
FarmLink
FSA Guaranteed Loan
$250,000 RSF Social Finance Loan
Partnerships
Kitchen Table Advisors
FSA
RSF
ALBA