Democratizing capital enables neighbors to make things happen
Temple-Wilton Community Farm, located in southwest New Hampshire, is the country’s oldest continuously operating Community Supported Agriculture (CSA) project. It is a biodynamic farm dedicated to nurturing the land itself as a living organism. It is financially sustainable, with a 30-year history, a devoted community of supporters, and a long list of people waiting to become CSA subscribers.
Yet in the spring of 2016 it was all at risk. The land beneath its cafe, farm store, cheese room, dairy barn, and intern housing was leased by the farm. In 2016, it was offered for sale for $500,000.
Because the farm didn’t have a half-million dollars and would be unable to get a bank loan, the farm and its community needed an outside-the-box partner to avoid the threat of the land being sold out from under them.
That’s where the New Hampshire Community Loan Fund came in, offering a problem-solving approach we call Community Collaboration Lending (CCL). CCL is an innovative way to empower stakeholders to transform their collective goodwill into the capital needed to preserve/build community.
Through this collaborative approach, the farm tapped into the support of its customers to buy the land and control its destiny. The result: a stronger farm business and a stronger community, today and for the long run.
This is one way the Community Loan Fund democratizes capital—and has been doing it for more than 30 years.
Who we are
When the New Hampshire Community Loan Fund was founded in 1983, we were among the first few nonprofit community loan funds. Today there are close to a thousand such community development finance institutions (CDFIs) across the country.
We use purpose-driven capital and training to bolster community-sourced solutions that make NH’s people, businesses and communities more resilient and its economy more equitable. This alternative approach to lending has financed close to 10,000 affordable housing units and created or preserved 3,800 jobs and 4,500 child care spaces in NH.
The money we lend is invested in us by more than 650 individuals and institutions. These investments are interest-paying at fixed-rates, and we have never failed to repay an investor who requested it.
Where we began
We listen to what communities say, join in conversation about how their needs can be transformed into viable enterprises, and consider how we can help provide the financing and extra expertise required to make it happen.
When the Temple-Wilton Community Farm came to us, we began as we always do: by building a relationship based on trust and mutual understanding. We asked them and ourselves: Did the farm’s leaders see positive qualities in us, and did they believe working with us would make them stronger? Did we see in them the dedication, coachability and self-awareness? The answers were yes.
Next, we looked deep inside their operation. We both needed a clear understanding of the risks and the opportunities so together we could find a way forward.
The Temple-Wilton farm’s leaders did the math: They could buy the land but could only afford to pay 3-percent interest. Given our higher cost of capital (interest-paying investments comprise our loan pool) we typically lend at higher interest rates than that.
The conversation could have stopped there. How to close the gap?
How we did it
The farm’s greatest asset is its passionate customers. Its wait list for a CSA share approaches 100 names. The people who eat in the cafe and shop in the store are fiercely loyal to the farm and its values. Some were even willing to loan money toward buying the land.
But the farm had no capacity to manage dozens of individual loans. And supporters weren’t all willing to make loans without a third party’s analysis and help in mitigating their risk.
The farm brought those customers into the conversation, and together we fashioned a collaborative solution. To help the farm purchase the land, twenty-three of its supporters agreed to invest in the Community Loan Fund, in increments ranging from $1,000 to $75,000 for 10 years at below-market interest. If the farm failed, they agreed to release us from repaying their principal. The Community Loan Fund then made one loan, providing the farm with the affordable financing it needed.
This is how we democratize capital locally.
That is not where the relationship ends. We stay engaged by serving as a sounding board, asking questions and providing expertise as borrowers prioritize opportunities and work through challenges. That engagement is in the borrower’s interest, the community’s interest, the Community Loan Fund’s interest—and in the interest of investors who make our lending possible.
Here to help
The willingness of local people to invest in their own communities is growing, and that’s cause for great hope. That’s democratizing capital. But good intentions alone don’t guarantee success.
We bring 36 years of thorough analysis, collaborative thinking, technical assistance and long-term engagement—the factors that turn good intentions into stronger communities.
Perhaps you’re eager to invest in your community, to recycle your money for the greater good—to democratize your capital. Perhaps you’re aware of a business that enjoys the good will of the community but needs help seizing an opportunity, meeting a need or overcoming a challenge. Perhaps you’d feel more comfortable if a trusted third party validated the opportunity and provided a structure for success.
We’re the New Hampshire Community Loan Fund. That’s what we do. That’s why we’re here. And we’re ready to help. Let’s talk about it.