When starting up or expanding your farm, rural business, or cooperative, seeking capital is critical. For a closely held business, savings and personal loans are common first resorts. For cooperatives, members’ equity shares are a key capitalization strategy. If the financial projections support debt, seek a loan. There are some grants for enterprise development. Consider new options such as crowd sourcing and microloans.
Cooperative Equity Shares, Preferred Stock, and Member Loans
Cooperative Equity and Ownership: An Introduction
Cooperative Finance Understanding how cooperatives finance themselves for start-up or expansion. Cooperatives have a unique opportunity to build equity by combining shares and then using them as collateral.
The Cooperative Foundation This list recognizes and describes useful funders of cooperative education and development.
Co-Bank Provides financial services to the agricultural and cooperative sectors.
Understanding Cooperatives: Financing Cooperatives Cooperative Information Report 45 Sec. 7
Commercial, Government, and Microloans
If you’ve written a good business plan and your financial projections can handle some debt, then this is a good way to get your business off the ground.
Banks
Start with commercial banks such as Bank of Hawaii, to see if you qualify for a small business loan. You will need to show your business’ and possibly personal financials and
Credit Unions
Credit unions are cooperatives. No profits need go to banksters, they are returned to the members in better rates and fees. Hawai‘i has many local credit unions.
Farm Service Agency
This part of the USDA gives loans to by farm land, operating capital for farms and a new $35,000 micro-loan. They all require good financials and collateral and lots of paperwork.
Hawaii Department of Agriculture Loans
While dubbed the ‘loans of last resort’, these are some reasonable loans for Hawai‘i farmers.
USDA-RD-Business and Industry Loans
These USDA guaranteed loans are good for medium size businesses that are not production agriculture.
USDA-RD-Commercial Facilities Loans
These loans (and small grant program) are to build public buildings.
Farm Credit Services
Is actually a national credit union of farmers. Their goal is to support farms and will work with you on your idea; much more personal than a commercial bank and they understand the risky business of agriculture.
Feed the Hunger Foundation
Has a microloan program for Hawai‘i food businesses.
A Guide to Funding Opportunities and Incentives for Food Hubs and Food Systems
Grants
Remember: no money is free money. Grants take a lot of time to write, administer, and manage.
Grant Writing for Farmers & Agriculture Cooperatives
Value-Added Agricultural Product Market Development Grants
Tim O’Connell gives an overview of Producer Grants, information on the objective, applicant, product, and general how-to.
U.S. Farm Bill Programs & Grant Awards
Published by the National Sustainable Agriculture Coalition, this resource is a quick reference guide to federal farm and food-related programs and grants.
USDA Programs in the Local Food Supply Chain
USDA is committed to supporting robust regional food economies across the food chain through grant awards and other programs.
Funding for Hawai‘i’s Farmers and Ranchers: A Webinar from The Kohala Center
USDA Farmers’ Guide to Farm Bill Programs
General Grant Application Checklist and Sample Timeline from The Kohala Center
State of Hawai‘i Office of Community Services
County of Hawai‘i Department of Research & Development
County of Kaua‘i Office of Economic Development
City & County of Honolulu Grants and Funding
County of Maui Office of Economic Development
Hawai‘i Island Business Plan Competition (HIplan)
Kamehameha Schools’ Mahi‘ai A Ola Initiative
Crowd Sourcing
Kickstarter A great website to put your business idea out there, see if people support it, and get funding. To be effective, you need to start with a good list of your supporters and have a strategy to pulse notifications to them.
IndieGogo This crowdsourcing site is similar to Kickstarter, except you have to make your goal to get the funding.
Kiva Tiny loans to help micro-businesses. Your social network is your collateral.
Slow Money A new movement attempting to combine small local investment in communities especially for food businesses.
LeanStart
Lean Startup A new movement post recession emphasizing business start-up with no debt by boot-strapping your way up from a small beginning.
Federal Programs for Sustainable Agriculture, Forestry, Entrepreneurship, Conservation and Community Development
Comprehensive listing of federal programs to support sustainable agriculture, including grants, loans, insurance programs, natural resources conservation management, and value added and marketing programs.