National Farm Viability Conference May 24 2017 Annie Heuscher Program Director annieFarmLinkMontanaorg wwwFarmLinkMontanaorg Brett Melone Director of Lending brettcafarmlinkorg wwwCaliforniaFarmLinkorg ID: 793886
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Slide1
Bringing Alternative Finance to Your Community
National Farm Viability Conference
May 24, 2017
Slide2Annie Heuscher
Program Directorannie@FarmLinkMontana.orgwww.FarmLinkMontana.org
Brett
Melone
Director of Lending
brett@cafarmlink.orgwww.CaliforniaFarmLink.org
Slide3Who’s in the room?
Slide4Farmer Fellowship Fund
Grants for nearly anything farm-related
Up to $5,000
Funded through private donors
Applications open once/yearQuestions? Email support@farmvetco.org
Slide5Micro-Finance Opportunities Through Grants and Loans
National Farm Viability ConferenceMay 24, 2017
Slide6Slide7Slide8Slide9Specialty Crop Mini Grants
Block Grant
Montana
Dept
of Ag
Slide10Specialty Crop Mini Grants: Eligibility
Up to $
5,000
Specialty
Crops include:
Beginning Farmers and Ranchers
Vegetables
Peas and Lentils
Fruits
Flowers
Nursery Crops
Horticulture
Slide11Specialty Crop Mini Grants: Application Process
Educational Meeting
Initial review by CFAC
Final review by MDA
Mini-grant funds requested and administered by CFAC
Slide12Specialty Crop Mini Grants: Use of Funds
Reimbursement-based
Spent within 90 days
Allowable
use of grant funds
:
Supplies and materials
Operational
costs:
seeds, inputs, etc.
Certain equipment
Slide13Specialty Crop Mini Grants: Use of Funds
Basic ‘seeds & hand tools’ projects vs innovative projects
Slide14Specialty Crop Mini Grants: Reporting
Industry-wide impacts
Slide15Specialty Crop Mini Grants: Project Success
Slide16Up to $10,000
0% interest, zero-fees,
crowdfunded
loans
Character-based lending
Slide17Slide18Endorsement
application
Lending review
team
Responsibility
Slide19Started December 2016
All borrowers successful
Half lenders the borrower knew, half lenders through the site
Slide20Slide21Annie Heuscher
Program Directorannie@FarmLinkMontana.orgwww.FarmLinkMontana.org
www.FarmLinkMontana.org
Slide22National Farm Viability Conference
May 2017
California FarmLink
Slide23FarmLink
Services for Farmers & Ranchers
Access to
Land
:
Farmland Listings DatabaseFarmland leases, purchases and partnership opportunitiesLand Tenure AgreementsFacilitation, negotiation, development and reviewFarm
Succession
Planning
Resources
,
Referrals
, Workshops, and Individual
Consulting
Slide24FarmLink
Services for Farmers & Ranchers
Access to Capital:
Technical Assistance
Financial
literacyPreparing for FinancingCredit buildingBusiness best practicesAgricultural LoansMicro- and small business, Operating, Equipment, and Farmland LoansResources, Referrals, Workshops, and Individual Consulting
Slide25FarmLink’s
Path to becoming a CDFI /
Is there a CDFI in your community?
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 fund2006 – 2011 loans underwritten and serviced through Cal Coastal, a local, ag-focused CDFI2011 began direct lending2013 became Certified CDFI through Dept of Treasury2017 $4 million available to lend2016 $2.3 million in loan volume2017 $3.5 million projected in loan volumeIs there a CDFI in your community?
Slide26Access to Capital
“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-Borrower
FarmLink’s
168 loans have supported more than 75 farmers across California. Impacts include:
764 jobs sustained and 196 new jobs created
30% average annual increase in gross business revenue10% average annual increase in family incomeMore than 85% of borrowers are certified organic farmers.
Slide27Our Philosophy
Agriculture is a business.
Agriculture is a capital-intensive business.
Regardless of scale, farmers will need capital to start, grow and maintain their businesses. The question is not if they will need capital, but rather, how much will they need, and where, how and under what terms will they obtain it.
The least painful path to obtaining access to capital is typically marked by planning and preparation before capital is needed. This planning and preparation is important not only for the purposes of accessing capital, but first and foremost, for building and maintaining a successful and resilient business.
Slide28Preparing for Financing
Know what you are looking for and WHY
How much money do I need?
WHY do I need it?
WHEN will I need it?
Where can I get it? What is the best option?Do I really need this thing that I’m seeking financing for? Tip: minimize expenses, start small, don’t take on too much debtTip: identify priorities, understand benefits & drawbacks of eachDiscussion questions:How do you decide when to finance?What are some risks of taking on debt?What are other options?
Slide29Preparing for Financing
Understand your options:
Traditional Financing for small businesses
Savings
Friends/ Family
Credit cardsBanksLines of creditPersonal loansBusiness loansRefinancingOnline lenders/ Pay day advanceInformal lenders
Slide30Preparing for Financing
Understand your options:
Agricultural-specific & Alternative Financing
USDA’s FSA
American
AgCreditCalCoastalCrowdfunding (Kickstarter, Barnraiser, CSA)Online Peer to Peer Lending (Kiva Zip, Lending Club, Prosper)Private Investors & Grants (Individuals, Slow Money)Niche Loan FundsCalifornia FarmLink’s Farm Loan Program
Slide31Overview
Slide32Eligibility
Slide33Application Process
What is the application process like for California
FarmLink’s
loans?
California
FarmLink’s loan application process may take 4 or more weeks, from the time of initial inquiry, to loan closing and disbursement. Please note that timelines will vary depending on applicants’ ability to submit a complete loan application package, and staff capacity (given current applications and current client needs) to provide Technical Assistance related to loan readiness.
Slide34Collateral
Slide35Technical Assistance
What type of Technical Assistance is provided by California
FarmLink
?
California
FarmLink provides free individualized Technical Assistance on a first-come/first-served basis, as well as education, resources, and referrals.
Slide36Technical Assistance
Loan Readiness:
Determining repayment capacity
Financial Statements (cash flow projections, P&Ls, balance sheet)
Financial Literacy/ Planning/ Management
Credit Management/Repair Business formation and management best practices Financing your Farm: available options; risks and benefitsAgricultural leases and purchase agreementsFinding/securing landDeveloping or reviewing agreementsCommunication facilitation/ Conflict resolutionReferrals/ResourcesBusiness Plan developmentUSDA Crop insurance, disaster assistance, and risk management Natural Resource management and conservation
Slide37www.cafarmlink.org
Brett Melone
(831) 425-0303
|
brett
@cafarmlink.org Thank you for your time!