By Bruce Corcoran
Local agricultural equity group AgriRoots Capital Management has teamed up with an investment bank to create a $9-million credit facility earmarked to help the agricultural sector.
Vancity Community Investment Bank (VCIB) and AgriRoots will use the funds to help small- and mid-sized farms.
It will be used by AgriRoots to extend loans of between $250,000 to
$1,500,000 to farms across Canada through the AgriRoots Diversified Lending Fund.
AgriRoots’ CEO Rob Nelson said the company’s business model is to provide consulting support and bridge financing assistance to farm families.
“We’re providing the agricultural sector across the county a very conscientious type of lending. We are very committed to helping farm families stay on their farms during tough times,” he said.
The rapid expansion of a family farm can leave farmers without the skill set to run all aspects of a much larger operation, Nelson said.
“We’re finding a lot of farmers, when a farm goes from 100 to 1,000 acres over four or five years, the farmers maybe weren’t trained on the accounting side. These are $5-8-million business operations. Sometimes they need a little help.”
Loans will undergo both AgriRoots and VCIB credit approval processes. This structure allows VCIB to benefit from AgriRoots’ expertise in agricultural lending while ensuring that each transaction meets VCIB’s standards for due diligence and values alignment.
“We know that supporting domestic small farms both enhances our national food security and provides benefits to our rural communities,” said Vince Gasparro, VCIB’s Managing Director of Corporate Development and Clean Energy Financing. “We’re pleased to partner with AgriRoots to provide financing options that will not only support domestic food supply chains at a challenging time but will also help small-scale farmers improve the sustainability of their operations.”
Nelson said VCIB is the first, but not last, investment partnership AgriRoots has lined up.
“We’ve been out in 2020 talking to a lot of pension funds and credit unions. It’s a process. We will have a lot more to share in the new year,” he said.