Agribusinesses in the north country got a major boost from the North Country Regional Economic Development Council this week, as the Development Authority of the North Country was awarded $1 million to administer a revolving loan fund for value-added products.
Offering low-interest loans up to $250,000 across the seven-county region, the fund is designed to provide capital for a broad range of agribusinesses, said Michelle L. Capone, director of regional development for the authority. Value-added products include maple syrup, meats, vegetables, wines, biomass materials used to produce energy and more. The authority will partner with Cornell Cooperative Extension locations in the region to promote the program.
The loans, which cannot exceed 20 percent of a projects overall cost, will help provide entrepreneurs and business owners with a portion of capital needed to jumpstart projects, Mrs. Capone said. The interest rate for loans is set at 3 percent or one half of the prime rate of interest, whichever is lower.
For example, if its a $100,000 piece of equipment, the bank might give $75,000 and the borrower would put in $10,000, she said. That would leave $15,000 that could be provided by this fund.
When the fund is officially established next spring, Mrs. Capone said, loans are expected to be in high demand across the region.
There are a lot of opportunities here and a growing movement for buying local food, she said. We have a growing demand for these products, but the question is how we get those products to consumers. The hope is that we would have all of these funds committed within 18 months.
In todays lending climate, some projects dont come to fruition simply because lending institutions dont meet the needs of small business owners, Mrs. Capone said.
Sometimes commercial lenders dont understand the business plans of clients and why they sometimes cant make monthly payments, she said. You have to understand the cash flow schedule for these businesses, and were more flexible than banks because we can work with clients to help them with their repayment ability.