Farmer Reserve Fund Launched

Santiago Lozano (right) with his approved operating line of credit secured by the Farmer Reserve  Fund standing next to  Grow Food’s Executive Director, Ethan Schaffer, and NCCU loan officer, Carolina Chavez

Thanks to all the great work from our friends at North Coast Credit Union (NCCU) and Viva Farms, and with the generous support of our social impact investors, we have officially launched our Farmer Reserve Fund to help beginning farmers grow their businesses.  This is the first piece of our food and farm microfinance effort as we work to make it easier for local agriculture producers to grow their businesses. The first Farmer Reserve Fund loan was made through North Coast last Friday to a strawberry farmer named Santiago Lozano.  A second loan  closed on Monday to Nelida Martinez, a vegetable producer. 

Slow Money NW developed the loan loss reserve fund as a way to fill a gap in financial services  available to small-scale farmers and to meet the interest of regional investors seeking to support sustainable agriculture most effectively.  Slow Money NW, a project of the non-profit Grow Food, did not want to administer the loans so it looked to partner with a regional lending institution. “We wanted to build on existing infrastructure in the community, and deliver services efficiently by building relationships, rather than reinventing the wheel — the reserve fund structure through North Coast is a perfect match.” said Japhet Koteen, Slow Money NW’s Project Manager.  

As a co-operative credit union, NCCU doesn’t take big risks with their depositor’s money, but they desired to help farmers in their community. Charitable donations from two local impact investors were used to establish the reserve fund to reduce the risk for the credit union.  Viva Farms provides an additional layer of due diligence for the fund by screening their student pool for the best potential financing candidates.

The Farmer Reserve Fund is a win for the credit union which puts its deposits to work in their community, and a win for the investors that donated the reserve funds since each dollar they put into the fund means up to five dollars available to lend out to beginning farmers. The farmers also see immediate benefits. “It is very difficult for new growers to access credit, “said Lozano. “ I will reserve some of my line of credit to cover any emergencies that come up. The rest I will use to pay my harvest crew before I get paid for sales.” Martinez says the loan is allowing her to grow her young business. “Thanks to this program, it’s much easier for new farmers like myself to get a loan and keep moving forward. We’re very thankful for the extra help in realizing our dreams.”  

Learn more about the Farmer Reserve Fund here.