Slow Money

A friend of mine forwarded me this story from NPR:

http://www.npr.org/templates/story/story.php?storyId=101794001

Dante the dairy farmer is trying to do exactly what we're trying to do, though we're asking our friends for far less money. It's essentially side-stepping the conventional lending system to seek capital from lenders who value much more than just the return. From our request letter:

"Starting up a brand-new farm operation is difficult, to say the least. We face numerous barriers including access to land, equipment, and capital. Fortunately, we've hurdled the first two barriers: access to land and equipment, both of which we will lease. We are now facing the final barrier – access to capital. We would like to avoid borrowing from a bank. Since we see our farming and the way we've been given access to land and equipment as an alternative to the industrial food and agriculture system, we are proposing an alternative capitalization plan. What we are asking of you, is to invest in Montana and the community by loaning us a portion of the much-needed start-up capital. In many ways we are attempting to navigate outside the system that tends not to value community-based ideals unless a price can be put on it. In addition to a modest return, you will get one share in our Thanksgiving CSA (winter squash, potatoes, onions, and a heritage turkey) and the knowledge you're helping to strengthen rural Montana and build a healthy Montana food system (not to mention, giving two native Montanans the chance to create a living back home). This could be considered a form of highly personal, community-based socially responsible investing. You will be investing in friends, in rural Montana, and in people you know well, who are dedicated to not only the community of Conrad and central Montana, but the greater community which makes up both Courtney's and my network that spans the length and width of our state."

I should mention, one friend we had asked for money reminded me that banks are part of the local community, too. He's right, and earlier this week I went into the Conrad Wells Fargo to talk to them about the possibility of a small loan should we be unable to raise what we need. Aaron, the loan officer, told me they have a few options for small businesses. The only one that actually would work for us would be a small business loan with an interest rate of 8-9%. Though that may be the reality in the conventional lending world, that seems high to me, especially for a small farm starting out. He suggested I visit with the FSA office to talk to them about loans for beginning farmers.

I'm hoping this first year we won't need to use the banks, local or otherwise, but can raise what we need from friends. I suspect, if all goes well, we'll need the banks for our future enterprises, so it's good to talk to them now.

All those friends we've asked have expressed their support, and we've received one loan so far.