Sure, getting a business loan these days is notoriously difficult. But have you ever considered approaching your supermarket for one?
Crain’s New York Business reports this week that, through its Local Producer Loan Program, Whole Foods hasprovided over $15 million in loans to small businesses nationwide whose products it carries. The grocer’s Northeast regional “local forager,” Elly Truesdell, told Crain’s that the 7-year-old initiative makes loans in the “$25,000 to $75,000 range, at about a 5% interest rate,” and is committed to loaning another nearly $10 million.
The paper points to two New York City startups that recently benefited from the program.
One, the TumericAlive organic energy drink company, borrowed $35,000 from Whole Foods to buy new filling equipment. Founder Daniel Sullivan told Crain’s that the loan “was important, not just because of the cash but because it created a strong partnership with Whole Foods.“
And a $60,000 Whole Foods loan enabled the Brooklyn founders of an ecofriendly tableware manufacturing company, Susty Party, to modify their existing machines and purchase new ones, which equipped them to add two products to their line.
Whole Foods’ backing is more akin to venture investing than a mere bank loan. Crain’s reports:
“To make sure borrowers thrive once they get funding, Whole Foods has twice since 2013 held its Local Producer Loan Summit, an event that brings together loan recipients and buyers from around the country. The company also sponsors appearances at farmers’ markets and regional showcases of vendors and in-store demonstrations.”
The drawback of taking a business loan from While Foods? Not much different from borrowing money from anyone else. “The only potential downside to taking money from your buyer is having limited flexibility in the terms and becoming beholden to them for your financing needs,” the CEO of an online NYC small business lender tells Crain’s.
