Maine Food Insider: Food startups can access $500K in new funding
Photo / Lori Valigra
Chris Hall, director of regional initiatives at the Greater Portland Council of Governments, said a new $500,000 loan fund aims to help startups in the food and beverage manufacturing sector.
Funding can be tough to get for startup food and beverage companies, but a new loan fund totaling $500,000 combining local, regional and state monies aims to ease that challenge.
“The City of Portland’s Portland Development Corp., the Finance Authority of Maine and the Greater Portland Council of Governments have set aside a portion of their funds to this [food manufacturing] sector,” Chris Hall, director of regional initiatives for GPCOG and the former head of the Portland Regional Chamber of Commerce, told Mainebiz. “Entrepreneurs in this sector don’t always know what money is available.”
He added that the new monies can be given by one, two or all three of the organizations depending on the application.
Of the three organizations, Hall said GPCOG is forking over the most: $300,000, or 10% of its total operating budget. The loan applications will be reviewed by a committee composed of members of the three groups.
Hall said of the total $500,000, the average loan size will be $25,000 to $150,000, which would cover six to eight companies a year. But those wanting a larger amount should still approach the group, Hall said, as they might be able to make introductions to other groups with deeper pockets to participate.
For example, he hopes to attract capital from out of state as well as angel investors. The new loan’s interest rates will be lower than those of banks, he said, perhaps even as low as 50% of the interest of a bank loan.
“We are bridging a [funding] gap if we get these businesses far enough down the road to get traditional financing,” he said. “The end game is jobs.”
Caroline Paras, economic and community planner with the GPCOG, added that while there are only three partners in the loan fund now, others that have talked with the group and may eventually participate in funding food companies in some manner are CEI as well as Norway Savings, Bangor Savings, Gorham Savings, Bath Savings and People’s United banks.
Food festival at Thompson's Point
The formal announcement of the fund, plus a rebranding of the Greater Portland Sustainable Food Production Cluster, will be made June 22 at the Portland Food Launch and Festival at Thompson’s Point in Portland, a day-long event with three educational tracks for Maine food entrepreneurs and producers from 8 a.m. to 5 p.m., followed by a food festival starting at 5 p.m.
The sponsors — GPCOG, Fork Food Lab and Norway Savings — expect more than 100 entrepreneurs and food producers to attend.
The Portland food cluster was redesignated as one of the country’s Manufacturing Communities for Food Production last September after being launched three years ago as part of the U.S. Economic Development Association’s Invest in Manufacturing Community Partnership initiative. Paras said there are more than 200 businesses in the Portland cluster with more than 2,000 employees.It is the only food-oriented of the 12 national clusters.
To earn the redesignation, the region had to make progress in strengthening its ecosystem to support food manufacturing. There are 12 such clusters in the country. The designation gives Portland’s cluster priority consideration for funding from several federal agencies. GPCOG leads the Portland food cluster program.
Also as part of the festival, the cluster was rebranded to be called the Portland Region Food Foundry. To date the cluster has attracted $48 million in federal funds.
Hall said the recent acquisition of Fork Food Lab by Brooklyn Foodworks was a plus for attracting additional money to the state, which has a burgeoning reputation for food.
“Fork Food is a great opportunity to bring new resources into Portland and open new commerce channels,” Hall said. “This is in line with how we see that sector. Someone larger comes in and invests. Capital access is problematic in the food sector.”
Editor's Note: This story has been updated to reflect the new name of the cluster.
Most Recent
Most Recent
Comments