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Agplus Generates New Ideas for Access to Capital

By Adrian Rehn

What can funders – bankers, lenders, government program administrators, fund managers, and others – do to help California’s vital food and agriculture businesses more easily access capital?

Over 65 leaders from business, finance, government, and the nonprofit sector gathered at the AgPlus Funders Forum on December 12th to address the critical issue of access to capital, hosted at the UC Agriculture and Natural Resources offices in Davis.

Meg Arnold, Managing Director of Valley Vision, kicked off the Forum, calling on attendees to leverage other leaders in the room, and to liberally share best practices. She then introduced Justin Emmi with Chase Bank – a presenting sponsor of the event – who specializes in agribusiness and food banking for nearly the entire State of California.

Glenda Humiston, Vice President of UC Agriculture and Natural Resources (UC ANR), provided the keynote address and set goals for the day. She described the work done to organize, categorize, and describe different types of financing for California businesses, resulting in the California Financial Opportunities Roundtable’s (CalFOR) 2012 Access to Capital publication. For years, this comprehensive guidebook has been the best resource available for information about financing and community investment in California. The CalFOR team is currently working on a 2018 update, which will include additional innovative and creative financing strategies that have arisen since 2012. The AgPlus Funders Forum is an important step toward collecting these innovative models and strategies for inclusion in the next iteration of this fantastic resource!

Following the keynote, a panel of experts spoke about the challenges they face in supporting or lending to food and ag businesses. Carrie Ellinwood, Lead Lender Relations Specialist with the U.S. Small Business Administration, observed that her SBA district is up 300 loans in the last year, and that average loan sizes are increasing, strongly indicating the need for more support programs for smaller businesses. Ismael Herrera, Associate Director of the Office of Community and Economic Development at Fresno State, talked about the interest that Silicon Valley is taking in the San Joaquin Valley, and the opportunities that provides to food, ag, and agtech businesses. Catherine Howard, Director of Strategic Initiatives at the Northern California Community Loan Fund, noted that borrowers often need meaningful assistance in addition to, and complementing, financial resources, which could help accelerate projects to market more quickly. Marc Nemanic, Executive Director & Chief Credit Officer at 3CORE, pointed out that entrepreneurship among millennials is made even more challenging due to deep student loan burdens, and that this area is not being addressed by existing business support programs.

During the afternoon, participants took part in four working sessions based on key areas of opportunity identified in the original CalFOR report, addressing a set of questions designed to identify tangible next steps:

Session #1: Supporting Economic Development: What are the emerging best practices in support of economic development in California’s communities? Are roles changing, are tools being added or updated? What hurdles, either in policy or in practice, are slowing progress, and how can they best be mitigated? This session will identify current and emerging examples, such as CALED’s statewide revolving loan fund, as well as the use of appropriate metrics to assess local economic development work.

Session #2: Supporting Small Business & Micro Enterprises: The smallest businesses in any community can be among the most challenging to both identify and then to serve, including access to capital. What is proving most effective in supporting these businesses, and what challenges remain?

Session #3: Effective Intermediaries: A variety of intermediaries already help to “close the gap,” offering access to capital with different terms and structures intended to expand its accessibility. What policy constraints do intermediaries face, and what changes would strengthen the roles they fill?

Session #4: Regional Finance Fund: Targeted financing vehicles, often defined in terms of regional or industry focus, can fill critical gaps while also providing funders a means of “investing in Main Street” to support local economic growth. What might a Regional Finance Fund supporting food and agriculture in the Central Valley look like? How has the California FreshWorks Fund evolved in the five years since its founding, and what lessons does its experience, as well as that of similar funds, provide?

Group participants then reported out to the full group and had an in-depth discussion around next steps in each of these areas. The CalFOR team is synthesizing the information gathered and preparing it for inclusion in the forthcoming 2018 CalFOR update intended to be a leading-edge resource for California’s entrepreneurs, businesses, and governments in securing financing.

For food and ag businesses and nonprofits who want to participate in the conversation around innovative financing structures, we invite you to join us for two AgPlus events on January 30th. The first event will take place in Woodland, and will feature a morning panel discussion around the importance of establishing an Ag Innovation Hub in Northern California, in proximity to UC Davis. The second event, in the afternoon, serves as the West Coast launch of Harvesting Opportunity: The Power of Regional Food System Investments to Transform Communities. This new publication from USDA and the Federal Reserve Bank delivers the latest insights on innovative strategies and resources to:

  • Supporting the next generation of farmers and food economy entrepreneurs
  • Models for collaboration between policymakers, practitioners, and the financial community
  • Research addressing how to improve regional food systems
  • Strategies for improving food access and security

Please register for both events to join Valley Vision, the AgPlus Consortium, and our local partners in contributing to this important work. Let’s support our vital food and ag businesses and nonprofits!

The Central Valley AgPlus Food and Beverage Manufacturing Consortium is managed by Valley Vision (Sacramento region), the Office of Community and Economic Development at CSU Fresno (San Joaquin Valley), and the Center for Economic Development at CSU Chico (North State) as part of a federal designation as a manufacturing communities partnership, or “IMCP.” This work is funded by the federal Economic Development Administration (EDA) to drive growth in the region’s food economy.

Adrian Rehn is a Valley Vision Project Manager leading the Cleaner Air Partnership and managing the organization’s communications.