Innovative Vermont agriculture, specialty food, renewable energy, and forestry product companies are a growing part of what gives Vermont its “green” lure. The Green Mountains traverse the length of the state dotted with inns, ski areas, farm to plate restaurants, craftspeople, artisans, hiking, swimming, fishing, camping, and a working landscape that includes everything from dairy farming and local food hubs to solar and biofuel farms.
It is this working landscape that is getting much attention in recent years as Vermonters continue to come together to build the resiliency of their communities and strengthen the resources of their state. In an age of fluctuating financial markets and challenging lending terms, developing businesses focused on sustainability are not necessarily the most popular in traditional lending.
Luckily socially responsible investing is on the rise where a fair return on investment is as equally important as the social and environmental impacts borrowers have in building healthy food systems, relocalizing energy resources, and creating resilient communities. In Vermont’s growing pool of alternative financing options, one fund gaining visibility is the VSJF Flexible Capital Fund which provides flexible risk capital to Vermont food, forestry, renewable energy, waste management, and environmental technology companies. The Flex Fund does not rely on collateral, like banks do, or ask for company ownership, like equity investors do. Instead it can offer flexible loans creatively structured somewhere between equity investments and traditional loans. Growing agricultural, forestry, and clean energy companies cannot typically offer the quick return on investment required by traditional equity investors, or the collateral required of banks and other lending institutions. The Flex Fund was created to address these financing challenges and provides “equity-like” loans which can be repaid over a longer period of time than traditional loans through revenue share payments. Also referred to as royalty financing, these flexibly structured loans are focused on long-term impact rather than a short term return.