Hiatt Loan Fund FAQ 2018-07-02T13:36:04-06:00

What Will the Loan Fund Do?

The Hiatt Fund will create employment opportunities, greater access to healthy food choices and cultivate a more locally-based food system in north Alabama.

It is a revolving loan fund offers financing to farmers and/or locally-owned enterprises that create jobs for persons with low-to-moderate incomes or provide services in under-resourced communities. Best of all, it offers financing at reasonable rates to those who do not have a credit history or the collateral required for traditional loans.

 

Who Can Apply?

First, and foremost, Hiatt Funds will be made available to local farmers and food-based businesses in the following north Alabama counties: Colbert, Cullman, DeKalb, Franklin, Jackson, Lauderdale, Lawrence, Limestone, Madison, Marshall, and Morgan. It will also serve locally-owned businesses in the region.

 

How Do I Apply?

The Hiatt Fund is administered by our local, non-profit partner, Neighborhood Concepts, Inc.  For a loan application or more information about the Hiatt Fund visit:

http://www.neighborhoodconcepts.org/narlf#!narlf/cl70

or call  256-534-7500.

 

What Types of Loans Does the Hiatt Fund Offer?

Eligible Uses Include:

  • Start Up Costs
  • Business Acquisition
  • Machinery & Equipment
  • Land & Building Acquisition
  • Working Capital
  • Inventory Purchase
  • Leasehold Improvements
  • Construction

Ineligible Uses:

  • Refinancing or Consolidation
  • Pre-development Costs
  • Residential
  • Professional Services

 

What Are the Loan Amounts?

$2,500 to $50,000 (in some cases up to $250,000 as the Hiatt Fund grows)

 

What Are the Loan Terms?

  • Building & Land – up to 10 years
  • Machinery & Equipment – up to 10 years
  • Working Capital – up to 3 years

 

What is the Interest Rate?

  • Fixed rate based upon WSJ Prime
  • Interest Only and Payment Deferrals Available

 

Why Would a Food Bank Launch a Loan Fund?

We know first-hand how hard it is for entrepreneurs in north Alabama to find capital. After approaching 40 different lenders for a construction loan without success, the Food Bank and partners postponed efforts to start a worker owned grocery store in 2010 that had financial support from the City of Huntsville and the USDA in addition to sweat equity from a network of local farmers and a neighborhood association. The project would have created jobs, access to healthy food choices in an underserved community and supported local farmers. While the timing of the project coincided with the worst economy since the Great Depression, we also learned that conventional banks find it difficult to loan to borrowers whose financial condition is subject to the seasonal cycles of agriculture.

We learned that if we want access to credit for innovative enterprises that strengthen our local food system, we will have to create that credit ourselves. This experience was the catalyst for the fund named in honor of Dick Hiatt,– who led the Food Bank for 28 years and inspired us with an exciting and pragmatic sense of what is possible.

 

What is the Long-Term Vision for the Fund?

In the short run, the fund creates access to credit for food and farming entrepreneurs and helps them build relationships with conventional lenders as they grow their businesses.

In the long run, the Hiatt Fund enabled Neighborhood Concepts, Inc. to evolve into a Community Development Financial Institution (CDFI) that serves North Alabama and can invest in neighborhoods facing economic distress.

CDFI’s are nonprofit lenders dedicated to underserved communities. A recent report from the Federal Reserve Bank of Richmond shows a correlation between poverty and limited access to credit. The report found that states with the lowest personal income per capita have the fewest number of CDFI’s. It ranks Alabama’s CDFI assets in the bottom three of all southern states.

This program is an element of the Food Bank of North Alabama’s proactive strategy to find solutions to hunger and poverty in north Alabama.