Additional Funding of $200,000 is Announced for Low-Interest SOAR Farm Loan Program
A new $200,000 grant from the Kentucky Agricultural Development Fund will provide $175,000 to KHIC to recapitalize the loan fund and $25,000 for Grow Appalachia to provide technical assistance.
The loan fund, which helps small producers grow nutritional foods so they can move into commercial production, was initially established in 2015 through a $200,000 grant from the Kentucky Agricultural Development Fund.
Original estimates projected that it would take two years to fully invest the original $200,000. However, demand was so great and the proposals from farmers in the SOAR region were so strong that all the funds were loaned in eight months.
“The Kentucky Highlands loan program continues to have a positive and lasting impact on the growth and development of eastern Kentucky,” said Warren Beeler, executive director of the Governor’s Office of Agricultural Policy. “This loan program is a sustainable source of financing that will directly benefit local producers for years to come. The members of the Kentucky Agricultural Development Board are proud to partner with such an innovative organization like Kentucky Highlands to support the expanded growth and diversification of eastern Kentucky agriculture.”
There have been 24 loans in 18 counties to date with the average loan amount of $7,234. Recipients range in age from 26 to 67.
“The loan was critical to the start-up of our business,” said Benny Brown, founder of Paq-Mule Innovations, LLC in Clinton County. “We used the funds to develop prototypes and apply for patents on the equipment we developed. We now have started a manufacturing company that is producing products to improve safety and sanitation for Kentucky poultry farmers.”
Loans have helped farmers grow organic produce and herbs for market; establish farm-to-table dinners; construct high tunnel greenhouses; develop prototype equipment for the poultry industry, and generally increase the size and scope of their operations.
“The loan fund not only provides favorable loan terms for growers but also uses the repayment of the initial loans to sustain the program for other growers,” said Jerry Rickett, president and CEO of KHIC. “Thanks to the support from the Kentucky Agricultural Development Fund board, we are building a sustainable loan fund that will support and educate growers to develop a strong local food system in the 54-county SOAR region.”
Grow Appalachia helps participants with their specific goals and needs as gardeners and food producers, including help for growers to market their products.
“Grow Appalachia at Berea College is proud to be a continuing partner with Kentucky Highlands Investment Corporation and the Kentucky Agricultural Development Fund in the SOAR Small Production Loan Fund,” said David Cooke, director of Grow Appalachia. “By providing low-cost loans and solid technical advice, we are helping secure the future of Kentucky’s small farmers.”
Here’s how the loan fund works:
- Almost all food-related producers, such as fruit and vegetable growers, beekeepers, gardeners of herbs and even farm markets, are eligible to participate in the program.
- The maximum loan is $7,500 with a fixed interest rate of 1 percent and no closing fees. Typically, the terms of the loan will be five years, with interest-only due the first year.
- The loans are fully collateralized.
- Grow Appalachia is available to provide technical support for each family and in some cases, help construct high-tunnel greenhouses and supply seed and soil amendments.
Growers who are interested in learning more can visit www.soarfarmloans.org or contact David Cooke at Grow Appalachia – (859) 985-3941, firstname.lastname@example.org; Edgar Davis at KHIC – (606) 864-5175, email@example.com; or Michael Hayes at KHIC – (606) 864-5175, firstname.lastname@example.org.
Kentucky Highlands Investment Corporation (KHIC) Founded in 1968, KHIC is a leading catalyst for community and economic development activities in southern and eastern Kentucky. Since 1968, KHIC has made hundreds of commercial loans, farm loans and equity investments, together totaling more than $350 million. KHIC is the project manager for the SOAR Small Production Loan Fund and will oversee program investments.
Kentucky Agricultural Development Fund, in statute, is administered by the Kentucky Agricultural Development Board. The mission of the board is to invest these funds in innovative proposals that increase net farm income and affect tobacco farmers, tobacco-impacted communities and agriculture across the state by stimulating markets for Kentucky agricultural products. This includes finding new ways to add value to Kentucky agricultural products and exploring new opportunities that will benefit Kentucky farms now and in the future.
Grow Appalachia was created in 2009 through funding from John Paul Dejoria of JP’s Peace, Love & Happiness Foundation. Grow Appalachia emphasizes food production in order to introduce as much low-cost, fresh, healthy food as possible to the region. The basic goal is to help as many families grow as much food as possible for both personal use and commercial sale. Grow Appalachia is the contact for growers participating in this project.