Imagine: you want to buy land and suddenly the opportunity arises to get that much sought-after plot. You sign up, try to get the necessary finance, and you are told that the sale will go ahead. But then the money is not there yet. The bank needs more time. While you have to pay. Panic! Since recently, AgraFonds may have come to the rescue in such cases. The fund which is created by agricultural entrepreneurs for agricultural entrepreneurs jumps into the gap that sometimes exists when bank financing is not possible (fast enough).
Guus, Harrie and Mark Schippers are owners of The Schippers Group, a family business that has grown into one of the largest suppliers for professional livestock farming. Since last year, the gentlemen are no longer on the management board, freeing up time for other initiatives. One of these is giving fellow entrepreneurs in the agricultural sector a helping hand with AgraFonds. The greenhouse sector can also benefit from this.
An alternative to the bank
"We also offer services to entrepreneurs in the horticulture sector and currently have a number of cases running," confirms fund manager Rick Jaspers when asked. The Schippers brothers have a large network. The men have good contacts with financial advisors from the region southwest of Eindhoven. "When an acquaintance came forward with a client who was looking for financing and couldn't work it out with the bank, the question arose whether they couldn't do something for that entrepreneur." With a loan, the brothers helped the entrepreneur move forward.
Soon the demand for loans among agricultural entrepreneurs proved to be high. "The gentlemen still speak to many agricultural entrepreneurs and also know how the banking sector currently works. As a result, they know well what is possible, and what not. We can develop this further,' was their idea." AgraFonds offers entrepreneurs a financial alternative to the bank.
Fund for loans
In order to provide loans, money is needed. Initially, hard work went into filling the fund. "From a number of entrepreneurs who were already providing loans themselves, we received positive feedback. For them, it also turned out to be nice to put out loans through this platform."
Currently, AgraFonds is in the process of broadening its own network. "We are in contact with many financial advisors and accountancy firms. In cooperation with the entrepreneur, a financial advisor or accountant, and AgraFonds, we look at what the financing needs of entrepreneurs are. And what we can do for them."
AgraFonds provides short-term loans. Rick acknowledges that a loan is not always a solution. "A loan can help, but is not always the best solution. It is still a loan. The borrowed money must be repaid. If there is no sound financial basis, it is not going to help the entrepreneur. Therefore, in such a case, we do not provide the loan."
The Schippers brothers' initiative, jumps into the gap that sometimes remains when the bank doesn't provide financing. "We may be a bit more willing to provide finance, and we care about the future of the sector."
Buying land
Rick offers the example of buying land. "If land is for sale, an entrepreneur has to act quickly. If you sign for the sale, and you get the land, you have to pay for it. Buying land before it is financed is often out of the question. It is therefore important to have money available quickly."
In practice, AgraFonds has seen that this is frequently not the case. Banks have to deal with many procedures, which can be time-consuming. In such cases, we can act quicker and more pragmatically than a bank, allowing entrepreneurs to act quicker when the opportunity to buy land arises.
The fund focuses on short-term loans. "This means that after one year, or several years, the loan expires. Then the amount is still refinanced at the bank. This is one of the ways in which we can help entrepreneurs."
Greenhouse expansion requires land. AgraFronds can help entrepreneurs who seek to finance their expansion projects by providing a loan. Photo: archive GroentenNieuws
For the entire agricultural sector
According to AgraFonds, the fund is available for financing requests from the entire agricultural sector. There is overlap between the issues that entrepreneurs deal with, Rick says. "Every case is different, but you see that entrepreneurs in the different subsectors regularly have the same issues when it comes to the acquisition of land, sustainability or financing an innovation.
Several greenhouse entrepreneurs have already applied to AgraFonds. The fund's specialists then contact the entrepreneur and study a company's financial health. "We look at financial figures, but also at what kind of entrepreneur we are dealing with. That is also important."
By mid-August, "several dozen" loans are outstanding. These involve serious amounts. "It's never really about small amounts. We only finance from one tonne onwards. There are also cases where the amount rises from one million to several millions. This is fine as long as the collateral is sufficient, and a company can bear the financing.
Given the outstanding loans, and the loans still to come, there will be enough capital in the fund for the foreseeable future. Rick reckons that eventually, additional money will be needed to supplement the fund. Then money could also come from agricultural entrepreneurs, for instance after the sale of their greenhouse farm or because of a government buy-out of their arable farm or their farm. AgraFonds is concerned with business loans, so there is no supervision by the AFM (Dutch Authority for the Financial Markets).
For more information:
AgraFonds
Smaragdweg 60
5527 LB Hapert, the Netherlands
Tel: +31(0)497 - 229 073
[email protected]
www.agrafonds.eu