Financing ‘Good Food’: Loan fund targets food- and farm-related businesses

Are you a good food entrepreneur? Are you in need of business financing that specifically targets your mission of providing healthy food to Michiganders? Good news – now there’s a loan for that.

The Michigan Good Food Fund (MGFF) is a new $30 million public-private partnership loan fund for food and farm-related businesses. It is designed to increase access to healthy food, improve the health of families across Michigan and spark economic development and job creation in communities that need it most.

Northern Initiatives, which provides financing and business services to small business owners in northern rural Michigan and bordering Wisconsin communities, is the only one in the state funding these loans, though more are expected to come on-line soon.

“This helps us get into new markets, instead of being so rural-focused,” said Chris Wendel, who is heading up the loan program for Northern Initiatives and based in Traverse City.

Northern Initiatives, headquartered in Marquette, Mich., is not a bank but a CDFI, or Community Development Financial Institution. CDFIs provide loans to entrepreneurs and small business owners who might not qualify for loans from traditional banks for a variety of reasons. Many times the lending is focused on low-income, disadvantaged communities and comes with business assistance and strategic planning.

The state rolled out the Michigan Good Food Fund last year, and is an offshoot of the Michigan Good Food Charter established in 2010. Among the charter’s goals are that Michigan institutions will source 20 percent of their food products from Michigan growers, producers and processors by 2020. The fund started with a $3 million federal Healthy Food Financing Initiative award to California-based Capital Impact Partners for use in Michigan. It is modeled after other statewide healthy food financing efforts, including ones in California, Illinois and Virginia.

Northern Initiatives has closed three Good Food loans so far totaling $80,000 – the first to Black Pearl in Pellston. The company produces a line of hand-crafted meat snacks and is exploring getting its products into local school lunch programs.

The Good Food Fund loan criteria require the food product meets standards for health and serves an underserved population. The intended borrowers can range from a small farm to a food manufacturer and can be a start-up operation or an established business eyeing an expansion. It could be an entrepreneur looking to expand a food business, a farmer’s market vendor in need of working capital for inventory, or a food incubator providing commercial spaces for food producers.

Businesses can apply for up to $250,000 in financing through Northern Initiatives. Loans beyond $250,000 are serviced by Capital Impact Partners. Other core partners include Michigan State University’s Center for Regional Food Systems, the Fair Food Network, an Ann Arbor-based national nonprofit and the W.K. Kellogg Foundation.

Wendel said interest rates fall between six and eight percent and terms are generally anywhere from three to 15 years.

While primarily a loan fund, there are limited grant dollars available. In combination with loans, the grants can be used for projects such as workforce development/job training, healthy foods consumer education and expansion of locally-grown food offerings.

For more information or to start the application process, call Chris Wendel at 231.409.7889 or visit northern