Organic Processing Vo1.7 #2 - March/April 2010

According to Peter Liu, initial founder and vice-chair of New Resource Bank, having a focus on sustainable businesses allows the bank to be more knowledgeable about this sector of the market and therefore evaluate risk more efficiently for each unique business.

Vincent Siciliano, president and CEO, adds, “A banker is your part-
ner in ways that are more than financial. If you pick a bank that has
values that align with yours and has expertise in your industry, your re-
lationship will be far more fruitful. Also, when you bank with us,
you’re working with people who are laboring to bring sustainability to
the world. In other words, your money is walking your walk, too.”
One example of how the bank promotes sustainability is the solar
certificates of deposit it offers. The bank uses the money deposited for
loans to fund solar energy projects and pays the depositors a competi-
tive rate of interest.

Liu adds that having a deep knowledge of the community of sustainable businesses enables the bank to connect members with each other. For example, introductions from the bank helped organic milk producers Straus Family Creamery find sustainable packaging maker Ecologic—helping each business move forward in their missions.

Other potential sources of debt financing with a more mission-based approach include Community Development Financial Institutions (CDFI)—private, specialized financial institutions that are targeted to borrowers who cannot meet the credit standards of traditional financial institutions because of perceived credit risk. Some CDFIs, such as the Natural Capital Investment Fund (NCIF), serve economically distressed communities in a particular state or region.

NCIF is unique because it was founded by The Conservation Fund, a
national nonprofit organization with a dual mission of both land and
water conservation and economic development. NCIF was created to
provide financing specifically for natural-resource-based business and
states on its website that “sectors of
particular interest include: heritage
and recreation-based tourism, value-
added and sustainable agriculture,
water/wastewater treatment, sustain-
able forestry and forest products, inte-
grated waste management, and
recycling.”
“We’re not a collateral-based
lender,” says Marten Jenkins, presi-
dent of Natural Capital Investment
Fund. “That’s important for new busi-
nesses and farm-based businesses that
may run into trouble and then face
losing the house or the land. We’ve
taken the time to understand the or-
ganic sector. These days, if something
is not traditional and really straightfor-
ward, most banks are not going to
fund it.” He gives an example of a
farmer who wanted to raise game
birds. Because NCIF has developed
programs for farm-based businesses, it
could evaluate the risks and assist the
farmer.

Wolf compares growing a mission-driven business to managing a successful organic farm, where most of the nutrients for healthy crops are generated from within nature’s systems, not from external inputs. “With the right

FUNDING TO MATCH YOUR BUSINESS AND MISSION*

TYPE OF FINANCING

DEBT EQUITY

Bank Co-Op SBAConvertible Angel Venture Private Public ESOP Stock Self Grants
Loan Loan Loan Debenture Fund Stock Stock Options
Offering Offering

5 = Most Compatible • 1 = Least Compatible BUSINESS PLAN PRIORITIES

Profit 5 Create New Model 2 Rapid Expansion 3 Growth by Acquisition 3 Social Responsibility 3 Environmental / Sustainable 2 OTHER FACTORS

Provides Support to Mgmt. 3 Funder Shares Values 1 Flexibility to Modify Plan 1 Maintain Control of the Business 4 Lowest Cost of Funds 5 Future Depth of Funding 4