Great Barrington – Two and half years ago, Robin Zeamer and Christopher Schaefer and his wife Signe were having dinner with their friend Rich Lumma at Radio Mexican Restaurant in Hudson, N.Y. They were mulling over the creation of a Local Investor Opportunities Network (LION) through which individuals could provide low-interest financing to local enterprises.
Such informal investment associations had been popping up across the country, as alternatives to conventional small business financing arrangements, preferring a personal connection between business and investor that institutional loans did not have. LION associations have been created in Washington, California, Wisconsin, Oregon and New York City.
Since that session, Zeamer, Lumma, and Schaefer — along with Monte Wasch of New Lebanon, New York – have put together a loose affiliation of investors called the Berkshire Columbia Investor Network (BCIN) whose 12 members have now provided more than $200,000 in loans – at between 5 and 8 percent interest – to local entrepreneurs. The annual BCIN membership fee is $15. Among BCIN’s beneficiaries, so far, are Laura Meister at Farm Girl Farm in Sheffield, Berkshire Organics in Pittsfield, the Stanton Home life-sharing foster care homes, and Ooma Tesaro’s Marinara Sauce in Windsor.
“We were four friends who got together because we were tired of no return on our investments, and we were locally engaged,” Schaefer explained, during an interview in his snug living room on Hillside Avenue. “We are locally engaged, and we wondered what we could do with money that’s useful to the local economy and to helping people through hard times.”
They got their answer from a similar investor network in Port Townsend, Washington, in East Jefferson County, that became the model for the Berkshire Columbia Investor Opportunities Network. Established in 2006, the Port Townsend LION now has 60 members, and has issued $3 million in investments, primarily low-interest loans.
BCIN is now seeking to expand its membership and opportunities for small businesses, and will be holding an information forum on Monday, November 14, from 5 to 6:15 p.m. at the South Berkshire Friends Meetinghouse, 280 State Rd, in Great Barrington. Guest speakers will include Laura Meister, Peter Stanton, and Dan Esko, general manager of the Berkshire Co-op Market.
“We need another 20 members,” explained Zeamer. “What we do is broker a conversation between investor and entrepreneur, and develop a wonderful kind of relationship between them, thereby using investment in a different way. We’re not a corporation. We are not an impersonal system. But we are recognized by Keith Girard at the Small Business Administration office in Pittsfield, who sends people to us, as does David Curtis at 1Berkshire. And we’ve established a relationship with Berkshire Grown.”
Most LIONs rely on pre-existing relationships between investors and business owners, thus avoiding federal securities laws, and the LION doesn’t invest as a group, but allows eah member to make his or her decision and negotiate terms.
“We don’t do start-ups, and we require that businesses be at a break-even point,” Schaefer explained. “We do offer bridge loans.”
For example, Laura Meister at Farm Girl Farm did not receive her USDA loan for spring planting in April, so she was successful in getting a loan from BCIN.
“We try to educate people about how they may be investing their disposable income,” Schaefer said. “But our loans to entrepreneurs have been successful. The monthly checks from our investments are rolling in. So far, everybody’s paying.”
For information on BCIN, contact Zeamer, Schaefer or Wasch at email@example.com.