Providing fair financing to Niagara’s farmers
If you want to expand your business chances, you’ll need a loan.
And the most logical place to get a loan is the bank. But what happens if the bank says no? Or offers terms that are unacceptable? For many Ontario farmers and those in the food supply chain, the options are unappealing: Loans from family and friends, credit card debt or simply foregoing the expansion or project.
But now, farmers in Ontario — including a new focus on Niagara — have another option. The Fair Finance Fund, which launched as a trial last year before officially getting going this spring, has announced a partnership with the Niagara Community Foundation (NCF) to provide loans of between $20,000 and $100,000 to businesses throughout Ontario’s food system. The fund provides financing for organizations that provide demonstrable social, environmental and economic benefits, and got a boost with $100,000 in funding from the NCF.
“We’re very clearly seeing the need is there,” said Sally Miller, project manager for the Fair Finance Fund.
In a survey they conducted before launching the fund, Miller said 30 per cent of the 450 responses received indicated a business owner had been denied financing or received terms, like sky-high interest rates, they couldn’t accept. Slightly more than one quarter relied on credit cards and 28 per cent said they had taken loans from friends and family.
And to top it off, she said 83 per cent said they expected to be looking for financing in the next five years.
“It’s a great opportunity for Niagara businesses and farmers,” said Bryan Rose, NCF executive director.
Rose said his organization was approached about supporting the fund and it made immediate sense. Given Niagara’s strong agricultural sector, and the foundation looking to get into social impact investments, he said it was a perfect fit.
“It’s a combination of doing good work in the community and receiving a financial benefit back to us,” he said.
Though it's still early in the partnership, Rose said municipalities like the Town of Lincoln have already expressed interest. The town has developed a community improvement plan for its rural lands and is a designated centre for excellence in agriculture.
Businesses must submit a preliminary application that quickly outlines their plans and their social mission, such as providing job training for employees or improving sustainability.
The fund tries to respond to those applications quickly, often within a week, Miller said, and if approved they must go through more in-depth applications.
While the fund’s maximum loan is $100,000, Miller said they identified co-financing partners and can help business secure additional financing.
“We can direct them to all kinds of partners to make up the rest of the loan,” she said, adding approval from the Fair Finance Fund throws a little weight behind additional applications.
Miller and Rose said they hope to see Niagara businesses take advantage of the fund.
For more information on the fund, to either apply for a loan or become an investor, visit fairfinancefund.org.