Jericho Settlers Farm.Photo: Veda
Successes, challenges and the future of entrepreneurship and agribusiness
Written by Joy Choquette, Vermont Business Magazine
“It was the best of times, it was the worst of times…” In many ways, Vermont's current business climate mirrors the sentiment at the beginning of Dickens' A Tale of Two Cities.
Entrepreneurship and the technology tools that support it have never been more accessible and accessible. However, in recent years many small and medium-sized enterprises have been forced to close down.
Some closures were due to the pandemic, others due to high interest rates and staff shortages. Some were victims of the 2023 flood.
But new businesses continue to open, and Vermont Economic Development Authority officials are busy processing new applications. VEDA has offices in Burlington, Montpelier and Middlebury and recently celebrated its 50th anniversary.
What are the Vedas? What happened in the last 50 years?
VEDA's role is to provide financial assistance to eligible agricultural and commercial businesses. We are also committed to helping these companies grow and create more jobs in Vermont. Since its founding in 1974, the organization has provided his $2.6 billion in loans to qualified businesses.
CEO Kathy Polhemus counts the agency's role in helping individual businesses and farmers grow “from obscurity to iconic Vermont brands” as one of the agency's greatest successes. A few of the most notable ones are: Ben & Jerry's, Gardener's Supply, Darn Tough Socks, and Black River Produce.
Kathy Polhemus, VEDA CEO. Courtesy photo.
“The list continues to grow, and we know that many of the borrowers we help today will be on that list in the future,” Polhemus said.
“We know that the cost of living is high and constantly increasing,” she added. “VEDA's goal is to help existing business owners and business owners just starting out achieve their goals. Over the past 50 years, we've seen this happen many times, but always… It's inspiring. We're here to support Vermonters, plain and simple.”
The organization also partners with other institutions to support entrepreneurs and farmers. “In agriculture, we work closely with our partners at the Vermont Department of Farm Service to provide loans to new farmers,” Polhemus said. “This program offers very competitive terms and is a great source of funding for those with less than 10 years of farming experience.”
How has VEDA contributed to the growth of small businesses?
VEDA started as a lender focused on commercial and industrial lending, but its scope and mission have evolved over time. Currently, financing is provided in three different sectors: agriculture and forestry, commercial operations, and energy.
“Lending to agricultural enterprises makes up about a third of our loan portfolio,” Polhemus said.
At the end of 2023, VEDA's loan portfolio was approximately $269 million, making it comparable in size to small regional banks. This figure includes $87 million in agricultural loans, $36 million in energy loans, and $146 million in commercial loans.
Polhemus explained how interest rates are set: “Unlike traditional financial institutions such as banks and credit unions, VEDA does not have deposits to lend out. Instead, VEDA borrows from large banks and re-lends that money to Vermont businesses. Finance To remain viable, VEDA must charge its borrowers an interest rate that covers VEDA's interest costs and expenses. VEDA's interest rates for borrowers are generally based on comparable loan types and credit risks. Lower than typical bank interest rates. This is just one of the benefits of doing business with VEDA.”
VEDA's website explains that loans through the Vermont Agricultural Credit Corporation (VACC) program feature variable interest rates that are subsidized for two years, or fixed interest rates that are subsidized for five, seven, or 10 years. I am. The site notes that these rates are subject to change and encourages visitors to contact the organization for current rates.
From coffee to sweet potatoes
Essex’s Uncommon Coffee Co. is an example of entrepreneurial success that ties into VEDA’s overall mission. This coffee roaster and cafe is owned by Maya Crowley, former manager of Uncommon Ground in Burlington. Crowley says his experience working at VEDA has been exceptional.
“I always felt like they went above and beyond to help me and cared about me and my story more than a lot of other institutions,” Crowley said. “Because our business was in the unique position of being both a successor to another retailer and a new business, our FLP (Farm Loan Program) financing required special attention.
Eunyoung Denny, VEDA's senior commercial lending officer, assisted Crowley with the financing process.
Coffee roasting at Uncommon Coffee.Photo by Jacqueline Potter
“She recognized that we didn't fit neatly into one category, so she helped us add context to our loan application, which was essential to the success of our loan application,” Crowley said. he said.
Timothy Hughes Muse and Brooke Hughes Muse, owners of Paulette's Laughing Child Farm, which supplies grocery stores and specialty markets throughout New England, said VEDA helped them start and succeed their farm. He said that he played a very important role.
“While we initially relied on the generosity of our neighbors for land and equipment, VEDA filled a critical gap by funding the purchase of the essential equipment needed to grow organic sweet potatoes. ,” Brooke Hughes Muse said.
Later, when the couple was ready to purchase a permanent farm, VEDA helped them obtain a mortgage.
“Their support was essential to our early success and stability,” Hughes Muse said.
Ian and Caitlin Ackerman, owners of Ackerman Maple Farm in Cabot, are another VEDA success story. His 17,000 maple trees on the couple's 148-acre farm produce more than 5,000 gallons of maple syrup and other maple products annually.
Caitlin Ackerman said VEDA provided her and her husband with the opportunity to start a business when traditional lenders were nowhere to be found.
Other banks “don't look at you unless you already have significant revenue,” Ackerman said. “VEDA understands the potential of your business plan and knows that even if you start from nothing, you can quickly succeed.” To take advantage of the opportunities they give you and make it happen. ”
She said authorities opened a door that would have otherwise been locked. Once a year, a VEDA representative visits the farm and reviews the number of couples together. While this may seem tedious to some, Ackerman finds it “very helpful.”
“They always give us advice on how to run our business. It's good to know we have that extra personal support,” Ackerman said. “Banks are big businesses, but VEDA takes it down to the individual level.”
Feige and Holly Mengook, who run Orwell's goat dairy farm Tap's Crossing, share this sentiment.
“VEDA offers a line of credit for farmers with three years of experience,” said Holly Mengook.
The couple opened the loan facility as soon as they met the VEDA requirements, she said.
Menguc said he appreciates the ease of working with VEDA and the way VEDA works with the Vermont Farm Service Agency.
“We work with VEDA because VEDA works with farmers and, most importantly, because of VEDA's close relationship with FSA,” Menguc said. Ta. “Our loan officers work closely together, which makes communication easy.”
Matt Durkee, president of Community Bank's commercial banking division, said he is not surprised by the glowing testimonials from VEDA customers.
“VEDA is often an essential partner for the state's financial industry to help finance new and/or expansion projects that bring much-needed jobs to the state,” he said. “Their collaborative approach to economic development is one of our key differentiators.”
“We are thrilled to be working with VEDA on the VEDA Board of Directors,” said Tom Gallagher, president and CEO of Peoples Trust Co. and VEDA board member. He said, “Rise and fall in interest rates can present unique challenges for any lending organization. VEDA has successfully navigated various interest rate cycles during its 50-year existence.”
VEDA at the 2023 Addison County Fair & Field Days. Peter Fitzgerald (left) and Ellen Hourigan (right) with VEDA borrowers. Photo provided by: VEDA
What does entrepreneurship really mean?
Crowley, of Uncommon Coffee Company, said much of what she does would surprise people who don't run a business. Many people think that running a cafe means working behind the counter. They do other work that Crowley does during normal weekday work hours: helping customers buy wholesale coffee, traveling to teach about coffee, planning and administrative work, and even maintenance and repair work. I don't think about it much.
Ackerman said the public has some misconceptions about the maple syrup production process. These include the cost and time involved in carrying out the sugaring operation. She says it's not unusual to fall asleep a little during the busiest parts of the season.
“Building a business from scratch is very time-consuming and requires a lot of guts,” Ackerman says. “But as we always say, 'We work 80 hours a week, so we don't have to work 40 hours.'”
Similarly, Mr Hughes Muse said there were many misconceptions about farming life. For example, many people are surprised to learn how busy she and her husband are in the off-season.
“Contrary to popular belief, winter is never dormant for us,” she says. “Instead of taking a break, we found ourselves immersed in a flurry of work, from carefully washing and packaging the sweet potatoes to coordinating shipping. It is in this cold weather that our workload reaches its peak. It’s a season and reflects the year-round dedication that farming requires.”
Mr Gallagher said Hughes Mews' story was typical of what he had heard from other farmers.
“Vermonters have historically adapted and overcome business challenges and come out stronger than before,” he said. “Across the state and within his VEDA customer base, there are many success stories of perseverance and overcoming obstacles.”
I'm looking forward to
Tap's Crossing has plans for continued, albeit slow, improvement and expansion.
“We are focused on staying financially comfortable while running a tight ship and keeping the number of animals to the lowest possible level,” Menguk said.
Ackerman Maple Farms is also looking to expand.
“We do a lot of online business and have been growing steadily every year,” Ackerman said. “In 2023 we diversified into firewood business, but VEDA still helped us.”
The farm currently produces 1,000 logs of firewood through this operation. “The goal is always to spend your money wisely, pay your bills to VEDA, and have a business that you can pass on to your children when it's all said and done,” Ackerman said.
At Laughing Child Farm, Hughes-Muse said they are not currently focused on expansion. “Instead of simply scaling up, we are working to hone our technology and improve the quality of our products,” she said.
She and her husband aim to improve their operations and produce even better sweet potatoes.
“This includes strategic investment in advanced field equipment to minimize crop damage and the development of state-of-the-art, climate-controlled storage facilities,” Hughes Muse said. “By prioritizing innovation and efficiency, we aim to not only meet but exceed consumer expectations and ensure the long-term sustainability and success of our farms.”
Mr Gallagher, a VEDA board member, said he was thrilled by the success of many of VEDA's customers.
“It's hard to look back at these borrowers' stories and not feel energized and excited about Vermont's future,” he says.
Joy Choquette writes from the Franklin County area.
