When looking for capital to put toward improvement projects, the region’s up-and-coming generation of farmers often turn to their supporters for assistance, using crowd-based funding platforms.
If you’ve ever given online to a campaign, you’re probably familiar with the two main types: rewards-based (such as Kickstarter.com), where you contribute money toward a project and, depending on your donation level, you get something in exchange, like tickets to an event, a T-shirt, or a poster. Donation-based crowdfunding, (like Go Fund Me) revolves around campaigns designed to help people in tough times, such as funding travel costs related to medical treatments, or funeral expenses when a loved one dies. Both of these which have raised billions to support projects and causes.
A third type of crowdfunding — equity crowdfunding — doesn’t treat the money raised as a donation, but more of a loan, designed to be paid back, and usually with interest. Equity crowdfunding can take on a number of different forms, such as selling shares directly to unaccredited investors with the promise of a modest return, or seeking contributions in the form of a low- or no-interest loan. This nontraditional way of raising capital is the best fit for projects specific to small businesses looking to make improvements or upgrades.
Increasingly, a number of area farms are giving equity crowdfunding a try, using a grassroots-based online platform called Kiva. With a tagline of “loans that change lives,” Kiva showcases projects from around the world, many of which are agriculture based. The campaigns range from as little as a few hundred dollars up to $10,000.
Steven Googin, who owns and operates North Country Creamery in Keeseville along with partner Ashlee Kleinhammer, first found out about Kiva when he contributed to a recent campaign for Hid-In-Pines Vineyards in Morrisonville. The campaign raised $7,200 to help the vineyard and winery finish off its tasting room expansion and help grow the business.
Another farm, Triple Green Jade Farm in Willsboro, used Kiva to raise $10,000 for a wood-fired bread oven.
Seeing those successful examples prompted Googin to give it a try on a project of his own.
“We need a little boost in our cash flow this fall, and it seemed an easier route to go than traditional lending,” he said. “Not that we didn’t qualify for a loan, but liked the idea of Kiva for two reason: its zero interest and we thought it would be cool to include our local community.”
According to Googin, the application and vetting process was simple and straightforward and they were able to apply and get their campaign posted in about four to five days. In less than two weeks into their campaign, North Country Creamery has hit the halfway mark, with 25 backers and almost $4,000 raised. The direct link is here: https://www.kiva.org/lend/1848686.
They have 30 days to reach $8,000. If/when they reach that target, they will receive the full amount, which will go toward some new equipment this winter. They will buy a bale processor for the back of their tractor to more efficiently make and distribute bedding for their 30 cows during the cold months ahead.
Once the cows move into the barn for the winter, they will need a steady supply of fresh bedding to keep them clean as well as warm, Googin said. Previously, Googin and Kleinhammer were using bales of compressed wood shavings, which did the job but was more expensive and required the extra labor of raking out the bales and hauling the shavings. With the bale processor, a grinder will chop up the hay bales and a hose attachment will allow for easier distribution of the bedding material, saving both money and time.
About $5,500 of the $8,000 goal will go toward purchasing the bale processor and the remainder will be used to buy the bales of bedding that will get them through this winter. Once fully funded, the loan will be disbursed through Kiva and has a 37 month repayment period. Loan contributors will be repaid via Paypal, coordinated through the Kiva website.