Posted in Assorted/Archived
THIS LOAN HAS BEEN FULLY FUNDED
A New Investment Opportunity
The BCDI Loan Fund is seeking investment shares ($250 per share) to provide $5740 to support two projects at the Long Branch School. The funds are being sought to purchase the materials and preparation for two courses: a timber framing work shop that includes the building of a small multi-purpose building; and an outdoor wood-fired oven work shop. The courses, which are important parts of the Long Branch summer program, will be taught by local artisans and result in structures that will both serve as collateral and become tangible assets for the School and the Community
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.
Long Branch School and General Store shares many of these same goals, and as a private undertaking in the center of Bowdoinham village, anchors a revitalization of our main street. The request for a loan from Long Branch School, the first outside of the agricultural domain, has been vetted and approved and your investment is needed to make it real.
The Long Branch School and General Store opened in the fall of 2011 on Main Street in the in the heart of the village in Bowdoinham. The first element of Long Branch’s business is to provide workshops, classes, and unique experiences using local craftsmen focused on self-reliance and sustainability. The second element of the business is a retail operation that offers local food and crafts in both a storefront and an on-line buying club.
The summer curriculum for the Long Branch school is presently under development, and they are striving to get the main workshop facility (“the old fire station”) to a point of being operational by mid-spring. They have already put a considerable amount of capital into rehabilitation of the former Credit Union building, waste management improvements, and the structure of the business. The loan application to BCDI is to cover the upfront materials and preparation expenses associated with two workshop programs: 1) a Timber Framing Workshop; and 2) an Outdoor Wood-fired Oven Workshop. The timber framing project requests a total of eighteen hundred dollars ($1800) and the outdoor mobile wood-fired oven project requests a total of three thousand nine hundred forty dollars ($3940).While each proposal has its own capital requirements, for purposes of simplifying the loan arrangement the two have been aggregated into one request. The grand total of the requirements for the two projects together is five thousand seven hundred forty dollars ($5740).
The BCDI Loan Fund is seeking investment shares ($250 per share) to provide $5740 to Long Branch School to purchase the materials and cover the cost of preparation for the two courses as mentioned. For the Timber-Framing Course, the funds ($1800) would cover the cost of hemlock timbers and oak pegs, and the cost of initial preparations to allow the structure to be completed in the two-day course itself. For the Wood-fired Oven the funds ($3940) would cover the cost of procuring a pre-owned tandem axle trailer, materials and associated cost of installation to support the oven and materials for the oven itself. 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. Long Branch will pay back the loan in three tranches at 6, 12 and 18 months. You will receive your initial investment plus interest at a rate of 2% for the life of the loan. For example, if you invest $250 you will receive $255 at the loan’s repayment plus you will be supporting a local enterprise that is providing wonderful healthy local products to the community and contributing to the economy of the community. BCDI will charge 3% interest on the loan to Long Branch, plus an administrative fee of $50.
All investment has risk. In this case the risks are numerous, which is one reason why a commercial loan would demand a considerable interest rate. Long Branch School is a new enterprise, heavily invested in a small town, with little excess reserve and not much of a track record. Participation in the classes that are offered has at times been less than planned. The weather may disrupt classes (though both of these classes could be largely carried out inside the new fire station workshop). The timber frame structure and the finished oven might not be valued by the market at full value meaning the loans would be less than fully collateralized. 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 (Pete Galle, Kathy Gallant, Kathy Montejo, Jack Beaudoin and David Whittlesey) and the Board (Tony Cox recused himself from the decision) 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 two products that are built will serve as collateral for the loan. In the opinion of the committees that reviewed this application, the risks are within tolerance, and the loan approved. 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.
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 in the heart of Bowdoinham village.
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 Long Branch School with an investment of $________ (multiples of $250)
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 go to the Membership page.)
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