Deerfield agency provides loans to farms, food businesses
Sometimes, what farmers and food-related businesses need isn’t just money, but business savvy.
That’s the premise of a new effort by PVGrows, the Deerfield-based consortium that provides a $750,000 loan fund to help initiatives that support the Pioneer Valley’s local food system.
Working with the Michigan-based Fair Food Network, the PVGrows Loan Fund will offer up to $10,000 in business assistance to selected entrepreneurs.
“This is an exciting development for local farms and food businesses who might be considering financing an expansion, but who don’t have the time or money to do the planning required,” says Sam Stegeman, coordinator of PVGrows. The three-year-old organization, whose partners include Franklin County Community Development Corp., and Community Involved in Sustaining Agriculture, can help locally based farm- and food-related businesses put together a financing package, like the effort mounted recently by Greenfield-based Real Pickles in an effort to become a worker-owned cooperative.
We faced an unusual financing challenge requiring a creative solution, says Real Pickles co-owner Dan Rosenberg. “Thanks to the expertise at PVGrows and their willingness to engage with us to thoroughly evaluate our options, PVGrows played an instrumental role in our decision to launch an innovative community investment campaign that only a handful of small businesses around the country have tried before.”
In the case of Real Pickles, it began a $500,000 preferred stock offering last month as a way to raise money to transition to a worker-owned coop and wound up drawing informally on the information from the PVGrows Loan Fund board, Rosenberg said,
“It was really helpful to sit down with a group and talk through all different kinds of financing.” In the same way, he added, “I know a lot of other fellow food and farm business owners in the Valley who are in a similar situation we were in, who didn’t have any formal business training when we started making pickles for a living. We leaned heavily on people who knew what they were doing, and we found it pretty essential in lieu of getting MBAs before we went into business.”
PVGrows Coordinator Sam Stegeman said the technical assistance funding is available to existing businesses that apply to the PVGrows Loan Fund although recipients aren’t obligated to get financing through the loan fund. They are obligated to match the assistance funding by 25 to 50 percent.
“In our three years of doing the PVGrows Loan Fund, we’ve found a number of businesses that come to us that are bankable, that would be a good loan, and many of them are able to find loans elsewhere,” Stegeman said. “That may be an indiction that lenders are familiar with seasonality and other quirks of the food business. But everyone agrees technical assistance continues to be a challenge.” Yet if there’s an ongoing need for technical assistance to help farmers and food businesses grow and become more viable, he said, there’s also a growing resource of expertise among people who can help, and CISA has even compiled a new database of farm-savvy business consultants.
There’s so much knowledge in the Valley, he said.
Among the kinds of operations that can take advantage of the program are existing food businesses that want to source more from local farms, expansion of those kinds of businesses, or expansion of individual farms or enterprises that help aggregate, store, distribute, process, market or otherwise help make the local food system more viable.