A good farm candidate should be capable of running and managing a small farm operation. This not only means growing high quality agricultural products, it also means managing all aspects of a small business (finances, purchasing, marketing, sales, etc.). A key factor to the success of any small farm is how well the farm is run as a business.
Local Farms Fund uses an informal process of getting to know the farmer rather than a rigid application process. The information required of potential farmers varies depending on the current situation of the farmer and the farmer’s specific needs. Generally, the process starts with an introductory call or meeting in which the farmer discusses his or her interest in working with Local Farms Fund and the Fund shares how it works with local farmers. If both the farmer and the Fund agree that working together would be a good fit, Local Farms Fund will ask the farmer to start providing written materials. Over the course of the diligence process, a farmer can expect to provide the following:
Farmer Biography or Resume
Local Farms Fund would like to get a sense of the background of the farmer, farm family, or farmer group
Historical Farm Records
If the farmer has been operating already, Local Farms Fund will require one to three years of historical financial results
Business / Transition Plan
An outline of the farmer’s business including a financial plan is a critical component in the evaluation process (if the farmer has no historical records a thorough plan is expected); and
Depending on the situation these can be on- and/or off-farm references.
After the first discussion and preliminary document review, an in person and farm visit will be scheduled.
Local Farms Fund has worked hard to create a lease structure that works for both farmers and investors. The lease is specifically designed to be easier in the first couple of years as the farmer is transitioning onto the property. The total annual rental cost is designed to be comparable to that of a traditional mortgage, with a facilitated transition period. The term is generally going to be 20 years and the tenant has a purchase option / right available after five years.
Please contact Kevin at LFF@localfarmsfund.com if you are an interested farmer and would like to learn more.