By Kathy Johnston
“Would you like to try a sample?” asks a vendor at a local farmers market, pointing to the many varieties of locally made hummus from Baba Small Batch. Shoppers at another local farmers market stock up on locally caught fish filets and smoked fish from South Bay Wild. And outdoor enthusiasts are big fans of local company All Good’s natural sunscreen and organic lip balm made with calendula grown on their local organic farm.
These three local food and farm businesses, and more than a dozen others, have all enjoyed an economic boost from an innovative local network called Slow Money SLO. All were ready to take the next step to grow their business, and Slow Money SLO investors, donors, and volunteers were ready to help, providing advice, coaching, and person-to-person low-interest loans totaling more than $650,000 so far. Along the way, the Slow Money SLO network has strengthened the local food system, the local economy, and the local community.
“We’re trying to fill the gap for businesses that have money from friends, family, or crowd-funding, but don’t qualify for bank loans — and it’s a big gap,” explains Jeff Wade, the founder and director of Slow Money SLO. Established in 2012, the local network is part of the Boulder, Colorado-based Slow Money movement for conscientious investing that “says no to oil and yes to soil” to fix the economy from the ground up, by offering “nurture capital” that’s halfway between philanthropy and investing.
The San Luis Obispo group is one of 30 in the U.S. and one of the most active. Sixteen food and farm entrepreneurs have received loans, with more in the works, and around 25 people are investors. Worldwide, the Slow Money movement has invested more than $50 million in 519 small food enterprises.
Slow Money is the brainchild of Woody Tasch, a former venture capitalist and entrepreneur who wrote Inquiries into the Nature of Slow Money: Investing As If Food, Farms, and Fertility Mattered. The book inspired local marketing expert Jeff Wade, and when Tasch came to San Luis Obispo to speak for the CAFES Center for Sustainability, Jeff encouraged audience members to form a local group. Their first loan, now completely repaid to the six lenders, went to SLO Natural Foods co-op to help with a move to a better location.
“We were honored and pleased to be the first recipient,” says Gwen Schmidt, general manager at SLO Natural Foods. “To have people step up and say, ‘We want you to succeed and we’re willing to put up some money’ was really exciting. Far above giving us loans, they gave us valuable marketing advice too.” The group also helped connect the co-op with local food businesses, resulting in quadrupling the number of the store’s local suppliers to 85 local vendors, all from within a 100-mile radius — including quite a few Slow Money SLO participants.
Jeff characterizes the financial boost offered by Slow Money SLO investors as “a loan between friends.” Food and farm businesses receive help with their business plans, then present their case to local folks, often retirees, who have money to invest. Lenders and borrowers decide the terms of a single-digit-interest loan, with tailored monthly repayments made over 3 or 4 years.
For local hummus makers Baba Small Batch, their growing business needed a key piece of equipment to take the next step. Slow Money SLO investors stepped in to help the company buy a machine that fills tubs with hummus or other products, automatically sealing and putting a lid on each one. The new equipment hums along in the background as general manager Cecilia Boettcher explains, “Prior to getting this piece of machinery, we did everything by hand, which was tedious and labor-intensive. Now we’ve doubled our output without a staff increase.”
The investment has really paid off for the company, which now sells its products all over California. “I feel like Slow Money SLO saved our bacon. They really did, no question about it. We got a financial makeover. It’s been extremely valuable to have their expertise; that put us in a position to move ahead, along with the machine,” Cecilia says. “It seems like the world of finance is about the bottom line, and they see beyond that. They can see that local entrepreneurs are quite good for our community. It’s a wonderful shift in investor mentality.”
For Morro Bay fish company South Bay Wild, seven local lenders helped Rob and Tiffani Seitz pay for a state-of-the-art smoker, a minus-10-degrees freezer, and a remodel of their north Embarcadero premises to allow retail sales. As part of the family’s direct marketing of their sustainably caught local fish, they can now vacuum pack high-quality fresh-frozen fish filets for sale to stores and restaurants. With the addition of smoked fish, their farmers market sales have doubled and the new product is a finalist for a national Good Food Award.
“You meet the Slow Money SLO people face-to-face. They stop by and talk about our progress. It really makes you work harder, thinking about reneging on a loan from a retired schoolteacher!” says Rob, as he overlooks the sparkling blue of the Morro Bay Estuary, the silhouette of his fishing boat reflecting in the calm water. He adds, “It’s good to know your community is betting on you.”
Tiffani notes, “People aren’t making these loans to make a lot of money. They just want to better our community. We hope to become Slow Money investors too.”
Over at Four Elements Farm on Hwy. 41 near Morro Bay, expansive fields of colorful calendulas are nearly ready to be harvested and incorporated into Elemental Herbs’ All Good organic body care products. Thanks to a Slow Money SLO loan, the All Good team is now headquartered in a renovated eco-friendly downtown Morro Bay warehouse. Loan funds have also helped launch new products and hire more local staff.
“What Slow Money people are doing is so cool,” says All Good founder and president Caroline Duell. “The participants are knowledgeable about business and helped me prioritize spending. Slow Money keeps investors’ financial interest in the local economy, and offers opportunities to businesses that aren’t necessarily bankable. It makes growth accessible. Plus there’s an emphasis on soil fertility. Imagine if we did that on a much larger scale!”
As a certified B Corporation, triple bottom line business, and member of 1% for the Planet, All Good and Caroline are especially pleased to connect with Slow Money SLO people “who share our ethos,” she says. “I encourage people to get involved, both as a lender and as a borrower. I think it really is helping our local economy and local jobs.”
Local founder Jeff Wade explains that in addition to low-interest people-to-people loans, Slow Money SLO can also help provide food and farm entrepreneurs with zero-interest Kiva Zip loans, or zero-interest loans from a locally based revolving loan fund created by tax-deductible donations.
“We’re always looking for people to be involved,” Jeff says, including food activists, food and farm businesses, potential investors, and donors. Slow Money is a nonprofit 501(c)(3) and accepts tax-deductible contributions as well. You can contact Jeff Wade at Jeff@SlowMoneySLO.org or call him at 805-300-2805.
As Gwen Schmidt at SLO Natural Foods puts it, “It’s an opportunity for small local businesses to try something they believe in. The community always benefits from local business. Slow Money SLO is a win-win for everybody.”