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Loan Guarantee Helps Rural Coop, Foodways Thrive

April 23, 2014

This is the first of a two-part series on participants in the USDA Business and Industry Loan Guarantee (B&I) Program’s Local and Regional Food Enterprise Initiative, a provision of the 2008 Farm Bill championed by NSAC and reaffirmed by Congress in the new 2014 Farm Bill.

Small food and farm businesses in rural areas foster vibrant local and regional economies.  However, the difficulty in accessing a loan necessary to take root – or to expand – can be a major barrier to these businesses’ success and broader impact, especially for a newly evolving market like the local and regional food business.

To address this issue, the U.S. Department of Agriculture (USDA) administers the Business and Industry Loan Guarantee (B&I) Program, which guarantees commercial loans for food enterprises based in or benefiting rural communities.  Changes in the 2008 Farm Bill and reaffirmed in the 2014 Farm Bill ensure that a minimum of five percent of B&I funding goes to loans for local and regional food businesses.

One local food business that has benefited from the B&I program is the Hendersonville Community Co-op (HCC) in Hendersonville, North Carolina.  Hendersonville has a population a bit over 13,000 and is the county seat of a southwestern North Carolina rural county, a substantial portion of which is considered a “food desert” by USDA.


A delivery of local collards to the Hendersonville Community Co-op. (Photo credit: HCC Facebook page)

HCC is a grocery store and deli where as much as possible, the produce sold is grown in-state.  Locally owned and run since 1978, it has come a long way from its beginnings as a 15-member wholesale buying club.  About 1,800 families and individuals in the area are now part of the ownership cooperative, and the Co-op has grown into a hub for groceries, produce, and freshly prepared foods.

“A healthy economy in the place where we live is so important to our producers and consumers,” says Gretchen Schott Cummins, member-owner and outreach manager at HCC.

Part of building a healthy economy means being able to meet consumer demand for locally produced food.  With the help of a loan secured through the B&I program, the Co-op is expanding to serve demand for local food, and it began construction on a new building this month*.

“Our move will be huge for the Co-op!” Cummins says.  “With this expansion, we can source real food on a bigger scale, put it on our shelves or prepare it in our kitchen, and make it more affordable.”

At a planned 6,000 square feet, the new space will be twice their previous square footage, located in a more visible and high-traffic area of Hendersonville.

By increasing the availability of healthy foods to local and regional shoppers, as well as the market for area producers, an expanded HCC is positioned to better address the economic and nutritional challenges of the region.


A rendering of the new Hendersonville Community Co-op building, which will be larger and more accessible to the community. (Image credit: ARCA Design, Cooper Construction Company)

“Through the existing co-op model, we pay close attention to nutrition and to the sources of the food we sell,” says Cummins.  “Hunger and diet-related disease are prevalent issues in our community.  With the expansion, we’ll be accessible to more of our community, including our community members who are socially disadvantaged, or on a tight budget.”

Banks can be hesitant to take chances on small food and farm businesses, limiting their capacity to expand and in turn create the kinds of benefits HCC hopes to realize.  A federal loan guarantee can make the critical difference in securing the needed credit.


The new HCC facility will feature an expanded kitchen for their popular deli. (Photo credit: HCC Facebook page)

“We know that we can have a positive impact on the health as well as the economy of our community,” she adds. “Because of programs like B&I, the Co-op can be a mainstream presence as people carry their grocery lists through town.”

Read more about the B&I Program in our guide to the 2008 Farm Bill here.

Though no significant changes were made to the program in the 2014 Farm Bill, check back for updated information in the coming weeks as we expect some programmatic enhancements by USDA very soon.  Visit USDA’s B&I program page here.

*NSAC ally Self-Help Credit Union funded the loan. Self-Help, is a national CDFI and leader in sustainable food systems financing.

Categories: Grants and Programs, Local & Regional Food Systems, Nutrition & Food Access, Rural Development

One response to “Loan Guarantee Helps Rural Coop, Foodways Thrive”

  1. […] of the 2008 Farm Bill championed by NSAC and reaffirmed by Congress in the 2014 Farm Bill.  The first post looked at financing for a North Carolina […]