August 15, 2011

Rez companies can't get loans

An update on Native American Natural Foods, which makes Tanka Bars and other meat products:

Growing Pains Hurt Native American Food Company

By Charles Michael Ray"That's the ongoing joke," Tilsen says. "The good news is sales have increased by 155 percent. And the bad news is sales have increased by 155 percent."

Part of that bad news is that the buffalo hot dogs the company sells have done 12 times better than projected, so now it needs to quickly come up with $80,000 to buy the raw materials needed to fill the new orders.

But in this economy quick access to credit isn't so easy. And Native American Natural Foods faces bigger hurdles than most other small businesses: The land the company headquarters sits on has no value as collateral.

That's because on Indian reservations, tribal lands are held in trust by the government. So the 6,000-square-foot building that is almost paid for doesn't show up on the company's bottom line.

"We literally went to every single lender in western South Dakota that would talk to us," Tilsen says. "I think we met with 11 banks and none of them would even submit the application."
Fortunately, the company put together alternative financing:Native American Natural Foods is still operating, but without the help of a government-backed loan. The company combined the resources of several organizations, including a wealthy Minnesota tribe and a community development fund that operates in inner-city Los Angles.

The company managed to pull together a half-million-dollar loan that will allow it to meet the growing demand.
Comment:  For more on the Tanka Bar, see Tanka Bar Company's Goals and Tanka Bars Coast to Coast.

1 comment:

Anonymous said...

Off-rez Indian lands are redlined anyway. It's also seen by a lot of companies that "natural foods" implies vegan credentials, since the two are given the same demographic (namely, white Boomers and white females 12-25), but bison, no matter how healthy it is, isn't vegan. So people assume health nuts won't go for it.