Bob Kane Wood Products
THIS LOAN HAS BEEN FULLY FUNDED AND REPAID IN FULL
New Investment Opportunity – Bob Kane Wood Products
The BCDI Loan Fund is seeking investment shares ($100 per share) to provide $1850 to support a new aspect of Bob Kane’s enterprise. Bob has all the pieces in place to launch a small wood milling operation, to compliment his firewood business on his property on the Post Road. He has the equipment in place, including a brand new WoodMizer L35 Hydraulic portable mill, but requires some critical repairs to his truck and some replacement saw blades for the operation to launch. Bob has exhausted his cash reserve getting to this point, and is seeking a loan of $1850 to successfully get started.
BCDI is continuing to mobilize local resources to help the community build on the wonderful assets that exist already – a burgeoning group of young farmers committed to sustainable agriculture, a vibrant arts scene, a long history of an eclectic population tempered by a strong sense of community, a location on Merrymeeting Bay midway between four key Maine cities – to make Bowdoinham an even better place to live and work. BCDI aims to stimulate, grow and sustain healthy local enterprises, create resilient local jobs, and facilitate collaboration among the for-profit, non-profit, and government sectors in the local community. BCDI’s focus is on farms, food, forests, the music, the art and the artisans that accompany them and the local businesses that support them.
BCDI’s main undertaking has been the establishment of a lending mechanism to meet local needs with local capital. The idea emerged when discussing the real needs of some of the young people in town as well as the need to bring back a “credit union of the old school” (small, focused on the serving needs of the local community, with no ambition to expand.) The fund’s first investment opportunities have provided $19,000 to support expanding organic produce farmers in Bowdoinham. Loan applications have been processed from receipt to disbursement (including the necessary due diligence and vetting of the application and raising the required capital) in approximately three weeks. The first two loans were paid back in full and ahead of their dates due.
The loan request from Bob Kane Wood Products is inherently a greater risk than previous loans funded through the BCDI process. Both the Screening Committee and the board felt strongly that the risk was worth taking, while making sure that potential investors are fully aware. The business that the loan will support is very much within the Bowdoinham tradition, and the purview of BCDI’s mission. To ensure its viability, the SC recommended and the Board approved that the amount of the initial request be increased so that the business model would not be undermined by lack of capitalization. The balance of the loan ($600) beyond what is needed for the stated purpose ($1250) will be held in the BCDI Investment account in Bob Kane Wood Products name to be used if and as needed to establish the positive cash flow anticipated for the business to be sustained.
Bob is a long time Bowdoinham resident who very much embodies the Maine spirit of both “getting by” and “sharing the bounty”. He lives simply, off the grid, and is proud to be an independent businessman. He owns his house and land (82 acres) outright, and the woodlot is relatively mature mixed hard and soft wood that has been only selectively harvested since the mid-‘50’s. Over the past few years, his income has come from selling firewood, and cashing in previous investments (CD’s) that he planned to take him to “retirement”, Social Security.
In 2012, Bob purchased a “WoodMizer” LT35 hydraulic portable saw aiming to move into value added harvesting of his woodlot. He has a note with Norway savings on the WoodMizer but owns outright a relatively new Kubota tractor, chain saws, splitter etc for the firewood side of his business. The purchase of the machine, plus the depletion of his liquid assets left him with no cash reserve as he works to establish this new aspect of his business. He is now confronted with repair issues on his truck (1995 GMC 1-ton dump) and the need for additional blades (hard wood) for his saw. Having the truck running is essential to him being able to make his business work. Bob is seeking a loan of $1000 to repair his truck (fuel system – computer and lines) and $250 for hardwood blades. As mentioned above, BCDI recommended to Bob and he concurs, that a cash reserve during this start-up period will be essential, and has included an amount ($600) to be held for that purpose.
The BCDI Loan Fund is seeking investment shares ($100 per share) to provide $1850 to Bob Kane Wood Products to make the necessary repairs to his truck and to buy the required hardwood blades for the WoodMizer. The loan will be repaid in full by 18 months from the time of disbursement when the investment plus accrued interest would be paid out to investors. You will receive your initial investment plus interest at a rate of 2% for the life of the loan. For example, if you invest $100 you will receive $102 at the loan’s repayment plus you will be supporting a local enterprise that is providing locally custom cut wood products (boards, furniture quality planks, table tops) to the community and contributing to the economy of the community. BCDI will charge 3% interest on the loan, plus an administrative fee of $18.50 The additional 1% and the service fee may be paid in kind.
All investment has risk. In this case the risks are numerous, which is one reason why a commercial loan is not feasible. Bob’s new enterprise is heavily invested in machinery, with no excess reserve and not much of a track record except his solid character. Bob is no youngster, just entering eligibility for Social Security, and the work that he will be doing is demanding. While he has a number of jobs lined up, they are verbal agreements not contracts. The weather may disrupt work. The loan would be collateralized by an outboard motor, the value of which is only an estimate and be subject to sale. There may be other potential impediments to successful implementation that are not immediately apparent. In the interest of transparency and a further word of caution, note that BCDI is not a bank, and the criteria applied in considering this loan are more personal and less rigid than might be applied by a bank. This process is locally focused – the individuals are personally known, and the screening committee’s examination of the application has been conducted in the spirit of neighbors seeking to find ways to help neighbors, and by doing so strengthen the community itself.
That said, the application process has been rigorous: the Screening Committee (Kathy Gallant, Kathy Montejo, Jack Beaudoin, David Engler and Steve Bunn) and the Board has broad and varied business, banking, farming, management experience; it examined the application thoroughly and did due diligence on the request and it fully documented the process as it was carried out. The committees that reviewed this application noted the risks and approved the loan. If for any reason the loan does not go forward and the funds are not disbursed, your investment, which will be held pending disbursement in a BCDI account at Norway Savings Bank, will be returned in full. Both Committees further agreed to “spread the word” of Bob Kane’s Wood Products and encourage neighbors in need of wood to use its services.
1. You will be making an investment that you can see, and even participate in, and in a neighbor you know.
2. You will be supporting the further development of a healthy enterprise taking advantage of Bowdoinham’s natural resources.
3. You will be helping support local employment.
4. You will be helping advance the creation of a local community support mechanism (BCDI)
The Next Step
There are a several ways to respond to this initiative, but we do hope that you will respond, even if it is to say “no thanks”. You can do this by phone, email or mail.
1. Yes, I would like to invest in the BCDI loan fund for Bob Kane Wood Products with an investment of $100.
2. I like this concept, but prefer not to invest at this time. Please keep me on the list and informed of other investment opportunities as they arise.
3. I am not interested in investing in this way, but please keep me informed about the evolution of BCDI and its engagement in the Bowdoinham Community.
4. I am not interested in this initiative. Please remove me from the list of future recipients.
(If you would like to become a member of BCDI both to help support the organization and participate in shaping its future, please visit our website at http://www.bcdi.us)
Thanks for taking the time to consider this opportunity to engage in the Community of Bowdoinham. If you know other Bowdoinham community members who you think might be interested in making this kind of investment, please share this with them or give them this contact information:
182 Ridge Road
Bowdoinham, ME 04008
Tel: (207) 522 4118 Email: firstname.lastname@example.org Website: http://www.bcdi.us
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